Focusing on the success of a loyalty program is important.
However, being pessimistic about why a program fails is also prudent.
I’d like to share the loyalty program failure factors and how you can plan to mitigate the risks of failure.
The failure factors are provided to you with gratitude and reference to The Delphi Report 2019 – Why Loyalty Programs Fail by The Loyalty Academy.
I recommend you download the report (it’s free) and review it carefully.
The report identifies and ranks 13 Failure Factors identified by Certified Loyalty Marketing Professionals (CLMPs) across the globe.
- Poor use of data
- Proving Performance
- Inadequate communications and dialogue
- Inadequate C-level support
- Too much friction (for members and team)
- Weak or absent soft benefits
- Employee Disengagement
- Inadequate Funding
- Lame Rewards
- Poor Funding Allocation
- Single Channel
- Single Tender Type
- Over enrolment
The detail on each is in the report and while they all may seem obvious to loyalty marketers, the power of the ranking provides a prioritisation to take action.
(Although this list of 13 are in the report, I have identified others based on experience plus there are also unique failure factors to a specific brand’s program and business nuances.)
With this in mind, we have developed a practical ‘Failure Factors Risk Mitigation Model’ to build an action plan for each of the failure factors. The model’s framework consists of:
- Failure factor: Details and defines the failure factor
- Causes: Identifies the causes for this failure factor
- Failure alerts: Identifies the alerts or ‘red-flag’ notifications based on defined metrics or other notifications of failure (how do we know?)
- Actions to mitigate: Details the required actions to mitigate risks of the failure factor eventuating
- Responsibility: Makes a team member or team take ownership of the actions
Why invest in building a Failure Factor Risk Mitigation Model?
The reality is, no matter how perfect your program planning is, there will be challenges that will take you by surprise.
As Mike Tyson once said “everyone has a plan until they get punched in the mouth”
Therefore, it is prudent and practical to conduct some planning to mitigate the risks of failure so you are ready (as you can be) when the failure factors start emerging.
So, to avoid a “What the Failure Factor” moment, I’d recommend you consider investing in a Failure Factor Risk Mitigation action plan.
Have a happy loyalty day!