Research by Colloquy has identified that, out of the 2000+ programmes that they have monitored since 1990, 58% are still in operation although many have evolved or had major modifications and some 9% have been totally re-launched. Therefore 33% of programmes have ‘gone by the wayside’!
Some may have been shutdown due to acquisition issues but there are some significant and foundational reasons why many have failed.
Three design flaws shared by failed programmes are;
- No bonussing/Flat funding rate
- No/very weak soft benefits
- Single tender system for Transactional Data Collection (see article The Invisible Customer)
The two other reasons for failure were;
- No dialogue with the member base
- Poor or little use of the data collected
It is essential that a loyalty marketing strategy has clear objectives from the outset and that these are part of the business culture and embedded in the broader context of the business strategy. When developing a loyalty programme there should be, as well as board approval, a key board sponsor, actively involved in the process.