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Loyalty programs were on everyone’s minds in 2016 – for better or for worse. From Chipotle to Air Miles’ mistakes in customer loyalty management, one must learn from this and prevail in 2017. To avoid media backlash, the loyalty experts at DataCandy are here to tell you what NOT to do with loyalty programs in 2017.
Chiptopia; Chipotle’s three-month loyalty program was deployed in July 2016 in the hopes of regaining their loyal fan base’s trust after the E.Coli outbreak that took place in the first quarter of 2016. Ironically, Chipotle’s CEO had been quoted several times claiming that they did not need a loyalty program because their fans were devoted to their brand’s promise of using fresh produce without GMOs. As they quickly learned, giving out free food and losing millions of dollars in the process with a temporary rewards program will not bring back lost customers. To try and save their plummeting sales margins, a short-term plan was put into effect instead of a well thought-out, strategic loyalty program that would have been more effective in the long-run.
Moving on to Air Miles and the consistently negative media attention they got for their loyalty program in 2016. Having your points expire without due warning and not providing all members with the same rewards made for some angry and disappointed loyalty members. Air Miles learned the hard way that listening to your loyal members’ feedback is important and there are grave consequences to taking a shortcut out of a loyalty program.
Even Starbucks and their loyal fan base experienced criticism when they rolled out the updated rewards program in April 2016. It seems that customers now need to spend more to earn the same, which is not exactly a win-win situation for existing loyalty members.
How can you best avoid the errors mentioned above?
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