If you’ve been using a CRM-based loyalty program or a punch card to build customer loyalty, you might be sinking money into a low-ROI loyalty program. Here’s why:
Swipe Cards Don’t Work
Many popular CRM-based loyalty programs use a magnetic stripe-based card that people are supposed to carry around and swipe when they make a purchase. These are really popular at the large grocery chains, so I’ve chosen to use them as an example. I routinely drop $100 on groceries whenever I go, and for years I’ve routinely also saved a significant amount through the ‘club’ prices at, for example, Safeway or Jewel Osco. Despite this, I’ve never actually held a grocery store’s “club” membership — I’ve been using their dummy card or a friend’s phone number for years. Safeway thinks my roommate, whose number I use, loves avocados (even though he hates them) and buys both fat-free and 2% milk. Ever since I’ve known this “loophole”, I’ve used it for two reasons: I don’t want to fill out a 2-page form for a swipe card I’ll forget every other week, and I already know I don’t need to. In the meantime, Safeway’s collecting the wrong info, giving me discounts as a free rider, and fails to engage anyone in the brand. This type of loyalty program makes customers loyal to the program itself, but not loyal to the brand. Continue reading Why Your Loyalty Program Isn’t Working