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5 things that will kill your loyalty program...and how to avoid them

Many poorly thought through loyalty programmes have been shown to fail within the first 2 years and if you want to be confident that yours doesn’t become part of this statistic, you need to make sure that loyalty is embedded, understood, and practiced throughout the business. This means it must be thought through properly, have the ability to evolve, and be appealing to fans and the business stakeholders. There isn’t any point in having a great customer loyalty programme that your fans or your fans facing staff know nothing about or don’t believe in.

While this statistic might be scary, don’t think of it as a blocker, think of it as an opportunity to succeed where your competitors may fail. So why is the failure rate so high and what can you do to avoid being a statistic?

This article explains the top 5 points of failure and looks at how to avoid the pitfalls?

No 1: Failure to Launch - Most programs fail, not because they are bad programs, but because they fail to launch. I often see programs were “those who do, do a lot; whilst those who don’t, don’t know” i.e. the program fails to capture the attention of fans from launch. It’s not that those fans have anything against the program per say – it simply that the program has not registered in their psyche. This is about basic awareness. Often fans (those who do and those who don’t know) all receive the same marketing and communications – but unless you find a way to “grab their attention” – fans do not internalise the value of the program. It is unfortunately true that most programs that fail to scale, fail at this critical point.

So what can you do to overcome this problem. Of course, good authentic marcoms help but of equal importance is the need to create an early “call to action” that “focuses” the fan to mentally register and engage with the program.

Here are just a few examples of these early calls to action:

  • Sign-up and activate your account (action) and get:

  • Your name in the ice

  • Your name behind the goal

  • Your name on the back of the away shirt / or training kit

  • Your name on the Flag

These initiatives are each designed to capture the imagination of the fan at the start of the program and drive them to log on. Having you name somewhere is nice – but when you can log on and drill into the image to see your name it becomes a new experience. Most importantly it has provided the fan with an instant launch point for the program. Our experience is that these forms of initiatives drive high levels of early adoption and awareness.

No 2: WIIFM (what’s in it for me) so you have my attention, how are you going to keep it? what’s really in it for me and why should I continue to stay interested? When explaining the WIIFM many operators fall into the trap of thinking that the fan is motivated by simply gaining free stuff. In most cases this is not true. Sports Fans are so passionate about their team and being a fan is as much about “social connectedness” says Daniel Wann, professor of psychology at Murray State University, who has spent much of his career dedicated to research about sports spectators.

Aligning the program with this sense of connectedness is key to achieving success. Fans are motivated to engage when doing so will give them a great sense of status with the Team and will afford them greater access to the team and other fans. Many programs fail to target these core motivators and therefore fail to maintain the focus of the fans.

Here are some examples of status driven activities

  • Chance to vote on MVP

  • Chance to vote on which player images should be on the outside of the stadium

  • Chance to vote on the new shirt design or logo

  • Priority access to limited play off tickets (based around tier status)

  • Curated content on team players or post-match analysis

No 3: Frequency & the Rule of Seven – even with a clear call to action and a clear motivation, programs can still suffer from the curse of boredom. Ultimately tomorrow’s experience must be better than today’s. Programs lose attention if not enough changes or happens in the program to keep it top of mind, attention and even wallet. Things need to happen within the program on a frequent basis and this needs to be planned.

Frequency (in the field of marketing) is defined as the average number of times a person is exposed to a specific message or activity over a period of time. Basically, it measures how many times a fan has the program served to them and engages with the program as a response. Generally, marketers tell us "the rule of seven" is ideal. i.e. awareness is secured if the fan engages in the program 7 or more times. This is of course a rule of thumb but is a good one to remember and build into the program – the quicker we can reach 7 the better and making sure that this level is maintained throughout the season should be planned in.

Ultimately Be flexible. New efforts don’t have to be perfect the first time. It’s more important to prove to fans that the Team recognizes the need to step up, step in their path and win them over — with genuine efforts. Everyone likes to be wooed, but most fans are smart enough to spot inauthenticity.

Here are some examples of frequency driven activities:

  • Market new rewards each week at the same time – the Thursday drop

  • Surprise and delight – recognize the existance of the fan by delivering real time promotions (discounts / offers) – it matters less what the offer is – it’s the fact that the fan receives it without asking or requesting.

  • Drop in sessions for fans – surprise zoom chat sessions with a player that members can drop into.

  • Accumulators – quick response offers to boost points and tier status.

  • Affiliate Partners – find partners that you can reward fans for transactional engagement 365 days a year. Game day offers only a limited number of engagement opportunities (8-81), but if you can link the program with your daily coffee purchase or weekly shop then you are adding 100’s of additional points of engagement to the program, all of which add to frequency.

No 4: the lack of FOMO – nothing motivates human behaviour more than the fear of missing out on something. Particularly if that thing is status enhancing and build my social connectedness. Building in FOMO will help keep the fans focused on the program. This requires two things: a clear and understandable mechanism to earn the benefits in the program and a clear and understandable mechanism to broadcast the fact that some fans are achieving the benefits, and by implication you are missing out.

Some examples on building FOMO

  • Social Media – every reward is a story – use social channels to tell the story of engaged and connected fans

  • Clearly indicate stock availability of rewards - so fans realise that there may be a penalty of waiting.

  • Spread the reward availability across multiple drops

No 5. A balanced Value Economy - Assuming you get 1 to 4 right there is still one other important thing you need to get right and that is the value economy. Simply put – can the fan “earn” access to the benefits (either by points or other mechanisms) offered under the program? Too easy (i.e. you are given lots of free points for doing very little) then you will devalue the enterprise and run out of rewards. Too hard (you just never earn enough to get anything) then you will devalue the whole enterprise. There needs to be a balance of effort and reward to maintain interest. This balance should be modelled as part of the program design. Programs fail if they fail to monitor and review this balance pro-actively. If you get to the end of the Season and you find that there are either too many points (or other enablers) in your economy or too few then the program has failed. This matrix should be measured and if an in-balance is emerging then you need to counter balance by applying burners or accelerators’.

Bottom line – successful programs don’t just happen. We have to work hard to achieve engagement and growth. If your Fans simply “shrug their shoulders and say “meh” to your program – it is not a sign of faltered loyalty; it’s a sign of indifference. Every Fans and Sports organization deserves more and avoiding these pitfalls will help deliver this more.

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