Omega Blog

Loyalty programs need unique customer experiences to get results

Posted on 22 August, 2013

Customer loyalty programs are designed to help companies improve sales, but they often fail to deliver the engaging customer experiences that result in true brand allegiance.

Loyalty programs are common within the airline industry. Each organization seems to offer its own version to attract frequent fliers with discounts and perks such as early boarding. Unfortunately, a survey by Deloitte showed that these programs don't work for their intended purposes. Business travelers do take advantage of the deals offered through the initiatives, but they don't limit themselves to just one airline. The more people traveled, the more likely they were to participate in two or more loyalty programs, according to the survey.

Respondents also showed a willingness to switch to competing brands, with two-thirds stating they were open to making changes even after they achieve the highest status levels that programs offered. This creates a problem for businesses relying on loyalty programs to attract repeat sales. 1to1 Media suggests that part of the problem with these strategies is the lack of customization. For all their popularity, loyalty programs are surprisingly monotone, with rewards being very similar between organizations.

The source noted that businesses should strive for unique customer experiences that set their brands and reward programs apart from the competition. To do this effectively, businesses need to understand their audience. Regular surveys could provide the insight that delivers results. Organizations should not assume that repeat buyers are completely satisfied with services. There may be opportunities to fulfill specific needs that can attract new audiences. This is particularly true in the B2B sector, where customized products are becoming more common. Understanding what customers want can enhance customer experience management (CEM) strategies.

Airline loyalty programs are notorious for their rules and restrictions on using frequent flyer miles. This may contribute to the high levels of business travelers using multiple programs. When customers can't collect their rewards, they are more likely to switch brands. This makes it necessary that companies minimize restrictions on loyalty programs. The initiatives should be about driving sales, not keeping potential patrons in a holding pattern. 1to1 Media stated that positive activities need to be reinforced immediately, because waiting until the next purchase may be too late. Adding perks such as free upgrades allows companies to boost customer satisfaction and create memorable customer experiences.

CEM strategies can directly improve companies' bottom lines by increasing customer acquisition, retention, growth and win-back. Customer experience management companies, such as Omega Management Group Corp., provide the insight and experience needed to generate results.