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77% of loyalty programmes fail within the fi rst two years,2 and only 41% of consumers say that programmes make them feel more loyal to a brand.3 It’s clear that loyalty programmes do not come close to keeping up with consumer preferences and expectations for brand engagement.
The failure of these programmes can be attributed to over reliance on transactional rewards; a fragmented user experience with no cohesion between channels; and a failure to recognise the human – emotional – factors that really make the consumer tick, want to buy and continue to engage. In a ‘choice-rich’ world where switching is easy, this lack of engagement will simply lead the customer to an organisation where they will be given the opportunity to become engaged.
The ineffectiveness of transactional loyalty programmes is exacerbated by customers’ ever increasing expectations of brands. This is principally driven by the ability of Google, Amazon, Facebook, Apple, Microsoft (also known as GAFAM) and other major players to create thriving customer relationships and foster loyalty through fully customer-centric interactions and superior, digitally- led customer experiences. The benchmarks that GAFAMs have established show the direction loyalty programmes should take in order to enhance customer experience.
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