Many challenges exist with traditional loyalty programs. Among them are:
- General consumer dissatisfaction with loyalty programs
- Excessive work required by consumers to participate in a loyalty program
- Lack of a connection and rapport between the loyalty program and its members
- High cost to acquire members.
Following are a few facts that quantify those challenges:
- 44 percent of consumers have had a negative experience from a loyalty program.
- 81 percent of American loyalty program members are enrolled in a program that they don’t completely understand.
- 85 percent of members report that they haven’t heard a single word from a loyalty program since the day they signed up.
Therefore, the traditional approaches to loyalty programs are simply not working in today's fast-moving environment. Change is required. Retailers and manufacturers cannot afford to continue investing in loyalty programs that are marginally successful, at best.
So, how does one transform a loyalty program? Consider the fundamental criteria for a successful loyalty program. They are:
- High adoption rate
- Low member acquisition cost
Next, the question is, “How can adoption rate be increased and how can member acquisition cost be lowered?” The answer is, “Take what works and turn each one up to the maximum, eliminating the things that don’t work.” Allavant has done just that, while adding new and innovative features.
Higher member adoption of a loyalty program comes from:
- Relevant and meaningful incentives to members
- A program that is fast to use and easy to understand
- Members sharing the benefits with friends
Lower acquisition cost comes from:
- Maximizing the use of digital distribution via mobile phones, kiosks, and the web
- Leveraging social networking
Over half of the U.S. population has a Facebook account – 70% of them log in at least once per day. A Facebook user has an average of 210 friends. The acquisition cost by digital means in conjunction with social media is up to 10 times less than traditional methods. With Allavant’s combination of these things that work and our advanced components, such as predictive analytics, point-of-sale integration, and mobile apps, it is easy to see how a 10X increase in ROI can be achieved.