Companies have long sought to use reward programmes to build greater customer loyalty - whether it's a coffee shop punched card, an airline with free upgrades, or a supermarket with points and coupons - and the end goal is always the same: building and strengthening customer relationships while boosting bottom-line results. So why is customer satisfaction with loyalty programmes relatively low? This article is copyright 2013 The Best Customer Guide.

According to Anna Koren, director for Ipsos Loyalty, there are at least ten factors at play that negatively influence the development and success of a loyalty programme. For example, after an initially enthusiastic sign-up, many loyalty cards are relegated to the back of customers' wallets never to be used again.

So how can a programme manager know whether or not a loyalty initiative is living up to its full potential? Recognising the ten most common pitfalls of loyalty programmes will certainly help put your loyalty programme back at the front of your customers' minds:

  1. Failing to deliver on ROI
    Loyalty programmes are expensive to setup and maintain. Is your company truly maximizing return on investment or are you missing out on up-selling and cross-selling opportunities?
  2. Poorly aligning with the brand promise
    Your loyalty programme is an extension of your brand. If the programme diminishes the customer experience, it's doing more harm than good.
  3. Not building deeper relationships with customers
    People don't want to feel like they're just another transaction. Demonstrating that you truly value your customers' business secures your brand in their hearts and minds.
  4. Treating all customers the same
    Different customers have different needs, and your frequent customers are seeking different things than your occasional customers. A loyalty programme should personalise benefits to each group for maximum impact.
  5. Lacking differentiation
    Run-of-the-mill rewards limit your programme's ability to attract customers to your brand-and away from competitors.
  6. Missing out on mobile
    The convenience of a mobile app that allows customers to earn and redeem points digitally often tops the effect of physical cards.
  7. Failing to evolve with time
    A successful loyalty programme stays tuned into customers' ever-changing needs and re-evaluates offers frequently.
  8. Offering bland perks
    Truly relevant rewards motivate customers to keep coming back for more.
  9. Being too difficult to use
    Even the most attractive programme falters if customers have to jump through hoops to earn and use points-their experience should be as easy as possible.
  10. Not listening to the customer
    An open dialogue is crucial to addressing evolving customer needs and pain points. The loyalty programme should enhance the customer experience.