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The Biggest Problems of Loyalty Programs


6 min read

The digital loyalty program has become an essential part of the digital ecosystem of modern brands. A brand’s loyal audience regularly uses its application, interacts with its products, and even considers this brand a very close friend. In other words, they become ambassadors of the product and spread its mission around to others. The value of a brand grows in stride with the number of loyal customers. Companies understand this, are spending millions on getting users involved in their web or mobile applications. Every good marketer is putting their hearts, souls, and lives into capturing a faithful audience for the products which they represent.

What is a loyalty program?

Loyalty programs are the best marketing tools that a brand can have. They are a well thought out set of pathways for customers that lead to certain benefits - bonuses, presents, discounts, rewards, and other advantages. The methods and criteria involved encourage customers to buy or interact with a product.

Loyalty marketing programs are one of the most effective ways to engage with your customers on a day-to-day basis. These days, mobile devices are an inseparable part of our lives, and they provide companies with unique opportunities to send users more personalized notifications, updates, and push-messages. Usually, the interaction with the mobile loyalty program is simple, and users just need to press a few buttons to stay in the game. Even so, the level of customer engagement can be impressively high. Individuals can collect coins, points, or other types of rewards that represent some monetary value, then exchange them for some goods and services, share the results with others, and so challenge them. However, the most important thing is that customers interact with the brand and stay tuned all the time.

Loyalty rewards programs are an important element of a comprehensive business strategy and a digital ecosystem for brands operating in the fintech, retail, FMCG, fitness & health, and entertainment markets. For such markets as tobacco, b2b loyalty program apps have become a must-have feature.

Dashdevs experience: how to create the best loyalty rewards program

As a reputed software outsourcing company, Dashdevs has been involved in the development of multiple customer loyalty program applications with different levels of our involvement in the software development process. In some cases, we’ve acted just as an executor who develops a web or mobile application. In other cases, we were involved in the implementation of the concept from the very beginning: evaluation, idea validation, actual development, and post-launch support.

Bearing in mind the Dashdevs’ experience in IT consulting and product owning, we know that the development of a reliable and functional application requires hard work from all team members. Product managers usually take care of their software projects as a mother cares for her baby. They put all their love into the design and development processes. Yet, product launch doesn’t signify the end of a product manager’s role and responsibility. They watch over the app throughout its entire lifetime on the market.

I can provide you with many examples of a successful application, but it is not the goal of this article. On the contrary, I’m aware of various cases when software solutions were destroyed by thoughtless actions of inexperienced business stakeholders and product managers. It can be a bit depressing to witness how a software idea with growth potential becomes useless in unpracticed hands. Web and mobile applications are tools that can be used for brand benefits.

The experience that I have gained working on the projects at Dashdevs is priceless. My ability to analyze the root causes of existing problems and uncover the sequential and consequential ties between those actions has strengthened throughout my tenure. Currently, my goal is to avoid such failures in the future, and that’s why I’ve decided to assemble seven crucial reasons why digital customer loyalty programs fail after being released to the market.

#1 No resources to support the digital loyalty program

This item covers marketing, engineering, and financial resources, which are tightly connected. Companies need to have employees for the everyday support of its users. If their users notify them of existing bugs and inconveniences, mobile app development teams need to investigate and fix the issues promptly. The loyalty program software is just a tool to enhance user interaction. Companies need to update their solutions, create new designs, and add relevant content. It is unreasonable to simply hope that a buggy software product with outdated content can become a leader of the market. Companies need to plan their resources and budget accordingly for efficient and smooth support activities.

#2 Ignoring technological progress

Digitalization is sweeping through nearly all business processes and markets. It is moving so fast that new ideas and new technological approaches are appearing every day. It happens, however, that some markets are stuck in the past. They are still resisting the latest methods, application structures, and content strategies. Sometimes developing companies take the approach of creating copy-cat apps of their competitors, almost without any changes. Nevertheless, if a company wants to take the top spot in the market, it needs to monitor the dynamics across different markets and follow technological trends such as using AI chatbots or Beacon technology.

#3 Weak promotion level

Submission of an application to the App Store or Play Market is only the first step. Further promotion is a must-have for any software solution. Companies can gain visibility for their apps via messages, salespeople, and advertisements. Without proper marketing, even the best loyalty programs will collect dust on the shelves of digital stores.

#4 No analysis of user activity

All successful applications that are leading the market for an extended period of time utilize a data-driven approach. They set up a bunch of data analytics tools that collect and move all the necessary information to their data-lakes. The next step is to process and analyze it. However, some companies can even forget to embed analytical tools into their applications. A business can obtain some primary metrics from Google Play Console or iTunes Connect, but it doesn’t show the product owner any dead ends or some parts that have gone unused. Fortunately, more and more companies start to use Data Science for user behavioral modeling.

#5 Ignoring personalization

People love when firms have different strokes for different folks. Though a particular approach doesn’t end with you showing their name at the top of the main screen. Data science and advanced app analytics can provide you with tools that can personalize actions based on previous behavioral activity. People like to use apps that interact with them.

#6 Unnecessarily difficult logic of the game

Some product managers create overly-complicated user flow logic. They miss points, steps, achievements, and multi-step rules. If you think that the user is going to spend hours trying to figure out the flow, you are wrong. They close and delete the application if the rules of the game are not clear.

#7 Too many changes

Sometimes a new product owner wants to completely change the application because they see it in another way. The same product managers with the team can produce too many updates. They change the colors and positions of the objects. I think everybody had a situation when they opened an application and couldn’t find some items after the update. Companies need to plan the changes and control the feedback.

Final thoughts

The goal of the mobile loyalty program software is to build long-term customer experience and create a more personalized approach. It can become the most powerful tool that will fuel your interaction with users and take it to an absolutely new level.

The central menace for customer loyalty programs is the product managers, their biases, and misconceptions. These are the people who drive the digital products. They decide what functionality must be added to the application and what user experience to implement. If they don’t understand the behavioral psychology, basics of the human interface guidelines, and the overall application development process, they can ruin the entire digital loyalty program.

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