Here is the test. Imagine you removed the programme tomorrow, with no announcement. Which customer behaviours would change?
If the honest answer is none, you are not running a loyalty programme. You are running a permanent margin reduction with a database attached, and paying for the administration of it.
Why so many end up there
Almost nobody sets out to build a discount scheme. It happens by accretion. A points mechanic launches, it underperforms, so the earn rate improves. Still slow, so a welcome bonus appears. Then a birthday reward, then a tier, then a partner offer. Each step is defensible on its own and the sum is a programme that rewards behaviour customers were going to exhibit anyway.
The measurement usually keeps pace with the drift. Enrolment goes up, so the programme reports well, and nobody asks whether enrolment was ever the point.
Almost nobody sets out to build a discount scheme. It happens by accretion.
What a good programme is actually doing
It changes one specific behaviour, deliberately chosen. Frequency, basket composition, category spread, referral, or the move from a single purchase to a repeated one. One of those, named up front, measured against a group who are not in the programme.
That last part is the bit that gets skipped, and without it you cannot tell the difference between a programme that works and a programme that has attracted the customers who were already loyal.
Design questions worth arguing about
- What is the one behaviour this changes, in a sentence with no conjunctions in it?
- Who is in the control group, and how long do we leave them alone?
- What does it cost per member per year, fully loaded, including the operations of it?
- What happens at the moment of reward, and is that moment memorable or administrative?
- Would a customer describe this programme to a friend without prompting?
The fourth question is the one that separates the programmes people talk about from the ones they merely belong to. A reward that arrives as a line on a receipt is not an experience. It is a rounding error the customer notices once.
The uncomfortable version
Sometimes the right answer is fewer rewards, better placed. Occasionally the right answer is to close the programme and put the margin back into the product or the delivery promise, both of which customers feel more directly than points.
That is a difficult conversation to have about something with a launch behind it and a team attached. It is also, in my experience, the conversation that has been avoided for about two years.