Naughty or Nice? Assessing Your Loyalty Program’s Holiday Report Card

It’s that time of year again.  In addition to celebrating the holidays with friends and family, it’s also a time when we naturally step back and assess the progress we’ve made over the past 12 months and look forward to the coming year’s opportunities.  It’s also a great time to take stock of your customer loyalty efforts over the past year and how you’d like to improve.  We’ll provide some guidelines and questions to help you determine where on the “naughty” to “nice” scale you might be regarding customer loyalty initiatives.

What are you proactively doing to drive customer loyalty?

Admittedly, nearly everything and everyone involved in the production, delivery, and support of your product or service impacts customer loyalty to some extent.  Your customer loyalty efforts should reinforce and amplify your brand and its ongoing connection with your customers.  Is your customer loyalty strategy more or less limited to building your email subscribers and social media followers, and sending periodic or even frequent promotions and posts to the masses?  While not necessarily “naughty”, endeavoring to personalize your communications, offers, and product or service offerings to your customers would be a good first step toward the “nice” list for both your customers and you.  A 2021 McKinsey study found (and our experience with moving Capillary clients to more personalized or hyper-personalized approaches affirms) that companies with above-average revenue growth drove 40% more revenue from personalized marketing tactics than their slower-growing peers.

How have your loyalty initiatives performed in the past year?

Undertake an honest assessment of your current arsenal of loyalty channels, tactics and platforms.  You may have an email list and/or loyalty program base numbering in the millions but how many are actively engaging with your brand?  How many are opening your emails, opting out of emails or texts?  Are you eroding trust by saturating your customers with too many emails, texts, and/or app notifications?   A recent study2 noted that 46% of consumers will unsubscribe if they feel overwhelmed by messages or find them irrelevant and 24% said they would stop giving money to the brand entirely if they are annoyed to the point of unsubscribing.   Beyond the channels and tactics, have customer retention and returning customer spending improved over the past year?  How well are you re-engaging previously lapsed customers?  Are your customer acquisitions barely keeping pace with customer churn (i.e. barely filling the leaky bucket)?

To what extent do you truly know your customers at an individual level?

Do you have the systems, data, and personnel to reach, influence,e and drive incremental revenue or behavior changes at an individual level with your customers?  To what extent have you developed actionable customer segments?   Do you know who your top customers, high potential, or at-risk customers are, and have strategies and tactics in place for them?

If you have a loyalty program, do you have a good handle on how it is performing for you?

Are you adding new members at a healthy rate or has growth plateaued? How many members are active in the program (had a purchase in the last year)? How many earned a reward? How many are redeeming rewards?  What are your reward and points expiration rates?  How much are we spending on this program and are we making any return on its investment?  These are all critical questions that we typically tackle with our clients as they seek to understand where their programs stand, and how they can be optimized or in some cases, restructured to improve their performance and satisfaction with their members.

If, after reading this, you feel more on the Scrooge than the St. Nick side of the ledger with respect to your loyalty efforts this past year, or wonder if your efforts could be improved in the coming year, Capillary Technologies has a solid team of customer loyalty consultants, technology, and customer engagement experts who stand ready to assist you.   Here’s to a happy, healthy, and rewarding 2025 and beyond!

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Randy has designed loyalty solutions for global companies across multiple verticals including the retail, consumer packaged goods, dining, entertainment, and financial services industries. Prior to joining Brierley in 2017, he was CMO for several fintech firms. With over 25 years of marketing experience, Randy has held progressively senior digital, direct, loyalty, and brand management roles serving leading firms in the financial services, airline, and consumer packaged goods industries.