Top 3 Reasons Consumers Quit Loyalty Programs and How to Prevent It

Having an effective loyalty program can do wonders for a merchant’s brand image and customer relationships. But getting loyalty wrong can have equally impactful negative effects. According to our recently published 2017 study, Shifting Loyalties, nearly half (45%) of Canadian consumers have quit a loyalty program. Among those who quit, 57% shop less with the brand or quit shopping with the brand entirely, a figure that rises to 69% among Millennials.

Why do loyalty program members stop engaging, and what can retailers do to prevent it
 

1. Too much time, effort or spend required to earn a meaningful reward. This indicates that the points accrual process, number of visits, associated spending requirements or communications required exceeded the relative value of the offers customers received for their loyal engagement. Members should feel they are getting back more than they put into the program. Otherwise, they perceive the program as simply benefiting the brand or retailer. Frequent opportunities to earn and redeem truly meaningful rewards are key to sustaining engagement.
2. Not enough value from the overall program. The value of a reward – or a loyalty program in general – is not the same for all customers. Loyal customers will make their preferences known, if not with direct feedback through customer service or social channels, then by ‘voting with their feet’ and leaving the program altogether. Where there is a perceived gap in value, the ‘test and learn’ approach is a crucial tool in assessing and quantifying where and for whom these gaps exist.
3. Rewards are not relevant or personalized. With an increasing number of touchpoints facilitated by the rising popularity of the mobile channel, the opportunities to collect and leverage accurate consumer data are multiplied, making it possible for merchants to extract valuable, actionable insights. These insights help develop programs that deliver value and a holistic, personalized experience for consumers.

Our report found that the average Canadian consumer belongs to five or fewer loyalty programs. Clearly, they are selective about their programs, and merchants and retailers should do all they can to retain and reward those customers – or risk losing them altogether.

To learn more about the state of loyalty in Canada and how your brand can get loyalty right, download the Shifting Loyalties report here.