Most reward or loyalty programs make it easy to rack up points, dollars or discounts. Presenting customers with a plethora of weird and wonderful opportunities to earn currency in their loyalty program is normally their main focus. However when it time comes to make good on the promise they put up all sorts of hurdles and barriers.

You know what I mean…

    • The rewards are a pittance. The value is just not there. A recent Choice survey found that for every $100 spent at the big supermarkets, customers earned as little $1 in rewards. Bonus offers can bulk this up, but do you know how your customers value the reward?


  • Customers are charged dollars or points if they dare to call to redeem (probably because the online redemption is just too hard!)



  • Blackouts mean you can’t redeem for certain products or during specific times that suit you



  • There’s minimum redemption or transfer hurdles (a real favourite of card companies who are trying to divert you from high cost frequent flyer points!)



  • Points expire before you have enough time to reach that hurdle – feels you’re caught in a revolving door!


A real pain. Who are they there to benefit? Definitely not the customer.

All these (and many other) restrictions were no doubt dreamed up by the CFO desperately trying to reduce the cost of what may well have become a legacy to the business. Unfortunately these organisations either don’t know the value of their program (from a customer lifetime value perspective) or the program is a dud. It needs a total redesign – a ground up restructuring aimed at truly capturing customers’ loyalty.

So what if you took the opposite tack and made it easier? Easier to enjoy the fruits of their loyalty.

Here’s a few thoughts…

    • Deliver real value. Baked in. Make sure customers can see and regularly experience the value of your program.


  • No hurdles, no minimums, no time periods. Your currency is able to be used as part or full payment. The points+pay components of card and frequent flyer loyalty programs are examples but in most cases the total outlay doesn’t stack up. Customers can spot a con when they see one!



  • Whenever, wherever. Want to redeem online? Sure. On the phone? Our pleasure. In store? Definitely. In fact encourage it in store. This will drive sales and reinforce the virtuous loyalty circle.



  • Encourage regular redemption, it will drive increased frequency and thus sales. Don’t make them wait. Myer are great at this – in part due to their quarterly gift card redemption mailouts.



  • Surprise them out of the blue. Make offers at the point of sale to both earn and redeem. Bonus redemption offers at point of sale are a fantastic way to not only bring a smile to a customer’s face but to drive incremental sales.



  • Don’t forget to thank them – recognise their value to you in a real and, as far possible, personal way.



  • And finally make the program free – no joining fee, no annual fee, no fees at all.


Whilst no doubt the cash injection to your profit and loss looks good in isolation you have to wonder about the logic of charging someone to be loyal to you? Shouldn’t it be the other way around? If you have to charge fees and impose restrictions to make the loyalty program stack up then the design is all wrong. You need to start again… and start with the customer front and centre.

Surely we should be making it easier for customers, not harder?