If you’re a small business owner and you have instituted a loyalty program, congratulations! You’ve done yourself and your business a huge favor when it comes to acquiring loyal, repeat customers. And as we all know, a loyal customer is among the most valuable assets your business can attain.

If you don’t keep your loyalty program healthy, it might die on you

But what if you have a loyalty program, but it’s not performing up to your expectations? Or if your program started out great and exhibited fantastic initial growth, but has slowed to a near standstill of late? Trying to address why one loyalty program might not be overly successful is an incredibly tough thing to generalize – there are a near infinite number of reasons why this could be occurring depending on your business, its history, its competition, its location, market conditions, the state of your industry, etc.

However, taking out all of the variables that are specific to your business’s exact situation, there remain a few common culprits that tend to bring a loyalty program to a grinding halt. In this blog entry, we’ll take a look at the top 10 reasons why loyalty programs across all trades and industries tend to fade. Hopefully, by reading this and examining your own program in detail, you’ll be able to turn the corner and bring in more repeat customers.

1. Value Proposition Too Low

A big reason why people join loyalty programs in the first place is to save money, so it shouldn’t come as a huge shock that if your members aren’t feeling like they’re being rewarded enough with their business, they’ll probably go someplace else. Being generous will go a long way toward acquiring your most loyal customers. If you reduce the amount of pizzas customers have to purchase before they get a free one from 10 to 6, it may certainly reduce your gross revenue by a noticeable margin. But considering how much more often customers will come in over their lifetime for a much more easily attained reward, and it will most likely be worth it in the long run.

2. Being Too Cute

While nobody likes something so straightforward to the point where it’s boring (which we’ll cover in our next point), something that’s so contrived and complicated that it’s difficult to understand can be just as detrimental. This starts with the name – while “[BUSINESS] Reward Program” won’t win any points for originality, people at least know what they’re getting into. It also has to do with how many tiers and different levels of the program there are – while some differentiation is a must, you don’t want to confuse your customers with a byzantine labyrinth of different points, time periods, reward tiers, etc.

3. Being Too Simple

The flipside of the coin above is having no originality and excitement whatsoever. Using the pizza example from above, 6 paid pies unlocking a free pie is simple and probably somewhat effective – but why not add at least one VIP tier for your absolute most loyal customers? 40 pizzas in a year and you earn a free pizza party for you and up to 10 friends, all you can eat – that’s a pretty tasty carrot to chase. Or maybe in addition to the buy-six-earn-one model, consider adding timed rewards as well – come to five Monday Night Football pizza nights in a row and the customer will get tickets to an upcoming game for the local team.

4. Poor Product

This is often the most difficult one to face for business owners, but it’s possible that the reason your reward program isn’t blowing anyone’s socks off is because your product isn’t either. Be honest with yourself – do you feel that your offering is worth your customers’ loyalty? Is it notably better than your closest competition? If not, no amount of gussying up your loyalty program will have successful, tangible results – you’ll need to seriously address your service or product and come up with effective ways towards improving it. If not, a lackluster loyalty program will be the least of your worries.

5. Too Easy To Lose/Forge

Simple, paper punch cards or stamp cards are slowly going away, and it’s best for both businesses and customers alike. They’re bad for businesses due to the relative ease in which they can be counterfeited, and they’re bad for customers since if you forget to bring yours with you at the time of our purchase, you don’t earn any points or progress. Having a scannable card eliminates both of these issues – customers can’t add artificial points or progress without going through your POS software, and by supplying their email or phone number, customers can still earn points even if they forget their card. Plus they can log in and see their balance online. It’s a win/win.

6. Too High First Tier

If your customer has to come in an excessively high amount of times or spend a proportionately high amount of money to earn the first reward, they will very likely stop using your program. Being generous is good (as we noted above), but it’s crucial that you’re at your most generous for the first reward. This gives people near-instant gratification and makes them feel rewarded after their first one or two visits. It can be something small and relatively inexpensive, but the more you can afford to give back during the lower-tier rewards, the more members your loyalty program will have.

7. Not Enough Differentiation

You need to closely study your competition to see what they’re offering in terms of loyalty rewards – heck, you should probably join them yourself to see what they’re up to anyway and go through the process of unlocking the rewards yourself (more on that next). If you’re running essentially the same program as your competitor, what incentive would a loyal customer of theirs have to jump ship and come over to you? You don’t have to reinvent the wheel – just make sure you stand out enough from your competition to be noticed.

8. Not Enough Personal Involvement

Some things look or sound great on paper, but unless you are involved on the ground level, you won’t know truly how good it is. This is also true with loyalty programs – you have to at least start with rewards and point levels that you think are fair and that would get you excited. Nobody knows your business better than you, so you’ll be in the best position to weigh the cost of prizes versus their value and excitement to your customers. And while you may not be a loyalty marketing expert, the average American is signed up for 18 loyalty programs, so at least you probably have a solid point of reference.

9. Too Much Communication

Say you’re the perfectly average American and you are enrolled in exactly 18 loyalty reward programs. Can you imagine how annoying they would get if they all started sending you emails and/or texts when you haven’t been in in a few days? It would likely be enough for you to quit all but your favorites or ones you had progressed the furthest in. Don’t make the mistake of worrying too much if people who have signed up for your program haven’t come back. Maybe an email after 6 months would make sense, but several over the first month will do more harm than good.

10. Not Enough Innovation

If you have fun coming up with the rewards and tiers for your loyalty program, it will shine through to your customers. There is nothing wrong with being simple, but a little variety and innovation will go a long way. Try to brainstorm about creative ideas – maybe give people a chance to earn double points if they donate an extra percentage of their bill to a charity that you partner with. If you’re struggling to come up with creative ideas for loyalty reward programs, the Internet is your friend. Lots of businesses have shared their success stories from experimenting with innovative rewards, and they say that imitation is the best form of flattery… just be sure not to imitate too closely.