Creating a good loyalty program requires careful planning, and the complexity of its implementation should not be underestimated, otherwise mistakes made will lead to losses for the company.
Mistakes in developing loyalty programs
Wasteful economy.
Proper design of a loyalty program should have a calculated basis, including the use of mathematical models, knowledge of consumer psychology and principles of trade marketing.
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Discounts should not turn into uncontrolled italy whatsapp number list charity with dismal financial results. It is necessary to take into account that an increase in the number of loyal customers will not bring income immediately, but the launch of a loyalty program can not only lead to a temporary reduction in profits due to discounts, but also require direct costs: for the development of events within the program, replication of cards, salaries of specialists servicing the system, etc.
Example: loyal customers are already the most active buyers, and it is quite possible that for objective reasons they cannot purchase the company's products even more often - if their share of purchases from the total need (share of wallet) is already close to the maximum indicator of 100%.
Clients who contact the company irregularly will also show little interest in the program if they fail to accumulate significant bonuses. As a result, profits from active buyers fall, since they have to be paid for with bonuses, and less loyal clients who could influence sales growth are deprived of serious motivation.
In this case, we can talk about an ill-conceived program project, and in order for the strategy to be effective, it is necessary to calculate in advance how the number of clients and total revenue will change: if the uniform conditions of the promotion turn out to be unprofitable, then it is worth introducing a system of levels or, for example, organizing targeted promotions to attract buyers, etc.
They cut seven times, then counted once.
The design stage lays the foundation for the program's success, but once it's launched, it's important to constantly monitor consumer reactions and make adjustments if necessary. This requires the participation of marketers to analyze what's happening, test individual elements of the system, evaluate the program's intermediate results, and provide recommendations for its optimization.
It is best to entrust the work to professionals, and it is not worth saving on this area of activity. Often, companies refuse the services of specialists or limit themselves to involving them at the stage of developing loyalty programs for clients, but in reality their participation will be very useful for analyzing the current situation - this way you will be able to manage the program during its implementation and achieve its maximum return.