The retail industry has been growing for a long time now, making shopping an easier process for the customers.

With a variety of brands, products and services to choose from, it’s easy for a consumer to buy anything without an ado.

For instance: a toothpaste is available in over 400 categories including whitening, brightening, lightening, spearmint, peppermint, natural, organic, travel size, purse size and more. The wide range of selection for a small product may encourage the customer to buy more than one product but sometimes lead to confusion as well. 

A variety as large as this for a product may raise questions for true customer loyalty that is hard to achieve. It is a challenge to engage consumers who feel that they are valued and want to revisit your store repeatedly. An effective customer loyalty program can make a difference in this cut-throat competition, which is why businesses of all sizes are going after implementing these programs .

According to a study, small scale businesses including cafes and boutiques have seen a 115% increase in loyalty program memberships in over six years. More than 3.3 billion users have been a part of customer loyalty programs in the past year 2015, causing a 26% increase from 2013. Businesses like Dunkin’ Donuts, Krispy Kreme, Taco Bell, Macy’s, AT&T, Chili’s, Rite-Aid, and more implemented loyalty programs as part of their business in 2015.

However, there are certain myths associated with these loyalty programs that are growing too. Myths that could counteract your business from growing and gaining loyal customers.

The popularity of loyalty programs amongst consumers demands businesses to know what makes them stick to your brand. Understanding your customers is a way of making better business decisions through which you can retain existing customers and build brand loyalty.

The complexities of building customer loyalty bring best customer loyalty software in picture, that can address all the intricacies related to a loyalty program. It is important to go for loyalty software that is affordable and accessible for small businesses too.

If you’re considering a loyalty software for your business, or already have one in place, it’s necessary to pull out facts from fiction. To decipher the misapprehensions swirling around, here’s a list of myths about loyalty programs debunked.


Myth 1: High-spending customers are loyal

Retailers assume that customers who are spending a lot of their disposable income are the most loyal.

According to a study in 2014, the management consulting company McKinsey & Company found that close to half of the company’s best customers goes to other retailers.

If you are relying on spending more on loyalty software that can help you retain your customers, you must wake up to reality. As customers are likely to shop elsewhere, thereby, their average spend is not a good indicator of their loyalty towards your company. In this case, you will need to have a more sophisticated way of measuring customers’ loyalty.

Myth 2: Demographic data provides suitable insight on loyalty

In the modern era we are living in the post-demographic age, traditional demographic models are no longer be applied.

Consumers’ action today is not consistent with their demographics and traditional attitudes. For instance, Twitter account’s handlers range between 55-64 age brackets that have grown faster in between 2012 and 2013.

This shift is a part of digital agitation amongst people. Digitalization has made technology more affordable and accessible for every age. The adoption of being digitized has also eliminated barriers to embracing products and services across all demographics. Gone are the days when demographic data was used to provide valuable insight into consumer behavior.

Myth 3: Historical data presents everything you need to know about the customer

Companies are using their CRM systems to have customer’s transaction data that simply is historical data.

Consumer activities interpreted by the historical data must be within the context as this data has a business value that is used over time.

Historical data gives insight into ‘what, when, and where’ the consumer has purchased. However, retailers should have a 360-degree view of their consumers’ behavior to get an accurate view of loyalty and can identify their next step. Unfortunately, historical data doesn’t reveal customers’ attitudes. Thus, in order to understand consumer’s know-how, retailers can use attitudinal and emotional data.

Myth 4: Qualitative measures are not as critical as quantitative measures

Studies show that customer’s emotions and attitude are key indicators of customer loyalty toward your brand.

Qualitative data is used to understand customer’s loyalty patterns, that are not linear. On the other hand, the quantitative data alone can’t provide positive results.

Consequently, both qualitative and quantitative data is significantly important for measuring customer loyalty. Retailers can capture customers’ emotions and attitude that accounts for unexpected nuances and add context to quantitative data. Getting insights gathered through communities can bring the human elements of understanding your customer research practice.

Myth 5: A customer loyalty program is just giving away free stuff

The primary purpose of a loyalty program is to increase repeat business. Integrating a loyalty software to your business encourages customers to earn rewards.

If you have loyal customers and you often reward them with free stuff, it can be a great way to invite them back to your store but some of these customers often visit your store to earn free goodies in contrast to other customers.

Giving away discounts, offers, and free items, in addition, can increase customer visits. These frequent visits of customers allow you to collect data in the result. This accumulated data will help you to know your potential consumer’s behavior. By using customer’s data, you can create different segments of customers to tailor marketing messages and provide more effective offers.


Myth 6: Customers are bothered or annoyed by text message promotions

Implementation of a loyalty software helps you to reach out to a significant number of customers through sending text messages.

A study says that 94% of loyalty members want to hear from brands they’ve signed up with, while some customers leave the membership because of excessive promotional texts, suggested by a recent survey.

Texting has become a mainstream platform to broadcast offers that many customers have already embraced. In this scenario, you must take customer’s permission to text them as 50% of people say they would like to hear from businesses via text 1-5 times a week. A loyalty software, like Loyera, gives your customers the option to sign up for text messages, emails, and notifications.


Myth 7: A loyalty program functions itself after customers signing up

After launching a loyalty program, the initial blast of customers sign-ups are required to be accumulated with relevant information.

Having said that, a customer loyalty program needs to have a continuous effort to make it successful for your business.

By creating marketing campaigns, you can target specific audience segments, track customer behaviour and continues to attract new potential users to the program. Unfortunately, you can’t just set up a loyalty program to your business and forget it. A loyalty software works better if there is significant effort put into it, like any other promotional tool.


Myth 8: Loyalty programs include membership cards

Several loyalty programs come with a membership card. However, these plastic cards are not applicable for all loyalty programs.

While some customers prefer to have a card option, others want a fully digital loyalty program that doesn’t require a wallet full of plastic cards.

A recent study shows 36.8% of customers like the card-based loyalty programs, while 33.3% like digital customer loyalty programs. Different customers prefer different ways of using their membership. In the same light, modern age consumers prefer joining a loyalty program that provides a mobile app. The trend of a mobile app shows an increasing demand for digital loyalty programs in the near future.

Myth 9: The lost margins from offering substantial rewards will outweigh any of the benefits

Businesses, small or large, are different and are catering to their customers with distinct perspectives.

Speaking of this distinctiveness, each business owner should consider their business facts and figures carefully.

Apparently, if you are doubtful about offering considerable rewards to your customers to outdo other benefits, you will be surprised to know that little benefits require small investment and can add value to your loyalty program. These little perks given by you to your target customers can go a long way to keep them happy and loyal towards your brand.

Myth 10: Simply offering more valuable rewards than your competitors is enough to be successful

Customers are sceptical when it comes to being a part of loyalty programs. These customers think they are being played to spend more time with businesses.

Businesses can make their loyalty programs more valuable and let customers use their rewards as per their convenience.

Make your loyalty program as compelling as possible. Tap into ‘ifs and buts’ of your products and services while offering them to your customers. Offering a ton of other convenient rewards to your target customers is likely to give more value to the customer in a broader context.

Myth 11: There is a one-size-fits-all blueprint for success with loyalty programs

Most loyalty programs are unique and align well with businesses. It’s quite possible that one of the brand values is helping them get success.

There are many ways of finding what your competitors are doing to invite more sales and retain their customers by performing different activities. 

If you pick up interesting facts about your competition, turn them in. For instance, if your competition is not social media-savvy, you can attract your potential users to sign up for newsletters, emails, and updates. By this way, your customers will feel a closer association with your brand.

Myth 12: A loyalty program can’t help prevent shoppers from using 'my store' as a ‘showroom’

Once you have launched your customer loyalty program, make sure your potential customers are getting the benefits of joining.

Some businesses, for instance, offer rewards point in terms of miles with certain flight companies while booking flight tickets. Many credit card companies offer miles when you over spend from your card

Including promotions, exclusive or personalized offers that tie to your customer’s previous purchases help them to know that they are valued to your business. Also, adding on-site push notifications while customers are completing their purchase activity to help them earn their reward points – this sends a message that you understand them.

Myth 13: Loyalty programs are difficult to manage

For retailers who don’t have the right monitoring tools at their disposal, can say that implementing customer loyalty programs can be a big challenge.

However, setting up a loyalty software like Loyera that can be easily integrated with a point-of-sale or retail management solution makes it easier for retailers. With this software, you can have more insight into customer shopping and buying behaviour which will eventually help you offer more personalized rewards and offers.

Myth 14: Loyalty programs make the checkout process more complicated

The good old days when you had to dig your wallet or pockets to find the right loyalty cards to redeem your reward points has now been digitalised.

With mobile payment apps and digital cards that keep all of a customer’s loyalty cards, coupons, and gift cards in one place, it has become much easier and quicker for customers to get rewarded at the point-of-sale. Introducing a mobile POS in your stores, integrated with your loyalty program can simplify and speed up the checkout process.

Final Thoughts

By considering these loyalty myths, you can develop a customer loyalty program that ensures your customers feel valued and comes back to you again, spend more, & think highly of your brand.

A loyalty software that tunes you with your customer values and emotional motivations to drive customer loyalty to your brand is exactly what your business needs. Building a relationship with your promising customers will give you a better understanding of the deep-seated values that your customers hold.

If you have any concern about starting a loyalty program in your business, get in touch with Loyera to learn more about this loyalty software that you’ll probably like to integrate into your business.

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