Skip to main content
  • Global

The 3 main obstacles to loyalty programs

What is customer loyalty driven by? If you take a look at some of the companies today with the most successful loyalty programs, you would come to the conclusion that success in loyalty programs is the result of accurate data-driven insights.

Retailers focus on loyalty programs. Why? In an era when consumers have more control over their shopping experiences than ever before - with multiple digital channels and a 24/7 at-their-leisure shopping cycle - loyalty programs are an integral part of continuous engagement with, and being relevant to, the customer. They enable you to encourage and motivate your best consumers to keep purchasing your product or service.

Retailers are left scrambling to get the right message for their loyalty programs across as quickly and accurately as possible. That isn’t as simple as it sounds: While loyalty programs can drive more revenue, a lot of retailers struggle with the data associated with those programs.

What are the three main obstacles to achieving a successful and sustainable loyalty program?

1. Too many data collection channels

According to a global research study conducted by Experian Data Quality, retailers on average collect data from more than three channels (e.g. website, point-of-sale, call center, mobile applications, other, etc.). That number increases significantly when you’re talking about loyalty programs. Many retailers face siloed databases in their different departments. In fact, a whopping 60 percent of retailers lacking a systematic, centralized approach to data quality strategy.

Solution: Instead of cutting down on the amount of channels you use to collect data, centralize your data collection management methods by appointing a single key data collection handler and systematize your data collection strategies across departments. A revamped, streamlined data quality strategy is a lot of restructural work, to be sure, but focus on the long-term, big-pictured goal.

2. Poor contact data

One of the first challenges with loyalty programs is getting the customer to actually sign up. Factors such as the amount of time it takes to enter in their information and how personal the information required is all impact the consumer’s willingness to sign up for a loyalty program. Not enough customers signing up understandably results in a more difficult time reaching aforementioned customers. However, sign ups mean zilch if contact data is inaccurate, as that also results in the inability to reach customers.

Solution: Implement a data quality solution. Eighty-four percent of retailers believe inaccurate or incomplete data results in wasted expenses in terms of resources, productivity and marketing and communications spend. Whether it be using predictive analytics to optimize consumer experience or implementing an A data cleansing tool, such as address or email verification, helps you validate if data is accurate and actionable in real time.

3. Not having a data-driven culture

There is a sharp correlation between how much a company’s profits have risen in the last 12 months and how many data quality solutions or strategies they put in place. Not emphasizing data quality in your business can cost you various and far-reaching consequences, such as customer engagement, loyalty and revenue.

Solution: Data quality should be prioritized as a key business focus. Loyalty programs need to be built on a solid foundation of data, but what does a good data foundation look like?

  • Cleaning your existing data
  • Consolidating and deduping records
  • Ensuring newly collected data is accurate before it enters into CRM and other systems

Good, clean data represents an opportunity to better understand your customers, drive actionable insights and optimize customer or prospect experience. When loyalty programs are the key to increasing revenue, customer retention and lifetime value, you want to make sure your data quality initiatives are up to par.

Learn more about data quality in loyalty programs by checking out our recent webinar Loyalty matters: How better insight can drive more loyal customers and more revenue