Loyalty programs are everywhere but genuine customer loyalty is not. If your program isn’t driving results, it’s likely falling into one of the following common traps:

1.     Off balance rewards

Many loyalty programs fail at the core question: is the reward worth it?  If members don’t clearly see value they’ll stop engaging. According to Forrester’s Retail Topic Insights 2 Survey (2024), 76% of US online adults say instant discounts are important,  when evaluating loyalty programs. Customers want benefits they can understand, reach, and use easily.

On the flip side, some brands go overboard, offering high-value rewards that feel generous but are unsustainable for the company’s profit margins, leading to low ROI and eventual rollback of the program.

And don’t forget the power of perception: a reward framed as reachable—say, at 100 points—feels more satisfying and motivational than the same reward set at 3,000 points, even if the effort required is identical.

2.     Copy-paste loyalty programs

This is where many brands fail before they even launch. Loyalty program mechanics are often copied from industry benchmarks or “best practices”, without considering the brand's identity and DNA, the category’s unique dynamics, or the customer's actual behavior.

Whether you're selling luxury cosmetics or groceries, a one-size-fits-all program won't cut it. If customer experience feels generic, they won’t resonate emotionally, and they certainly won’t create stickiness.

3.     You’re communicating — But are you connecting?

Here’s the paradox: loyalty programs are supposed to bring you closer to the customer, but bad communication can push them further away.

Too much noise: Mass email blasts, generic SMS campaigns and irrelevant push notifications  can make your most loyal customers feel spammed. Even worse, many programs ignore where the customer is in their journey. A first-time buyer doesn’t need the same message as a VIP or someone who’s gone inactive.

The problem isn’t the volume of communication. It’s the lack of personalization and context. According to Salesforce's State of the Connected Customer report, 66% will stop buying from a brand if they feel they’re treated like a number.

If you’re not talking to the right people, with the right message, at the right time — you’re just adding to the noise. Loyalty is a relationship, not a campaign.

4.     Sitting on data you don’t use

This one’s critical. Loyalty programs generate incredibly rich data. You may have access to deep behavioral and transactional insights, showing who buys what, when, how often, and even why. But in too many cases, that data goes unused.

No segmentation. No predictive modeling. No tailored next steps. The data is there, but the insights are not. This leads to static programs, flat engagement, and missed opportunities for growth.

5.     Omnichannel in theory, chaos in practice

You’d expect it to be obvious by now: modern shoppers move between channels — mobile, web, store, and app — often in the same journey, without thinking twice. Yet many brands still run loyalty programs that don’t work across all customer touchpoints, or worse, treat each channel as a separate world. The result is an inconsistent loyalty experience, and customers quickly lose interest because they expect one seamless, omnichannel journey.

And underneath it all lies a deeper issue. Without a unified customer profile, a brand can’t truly know its audience  and risks missing opportunities for relevance, personalization, and growth.

So how do you avoid these loyalty mistakes?

To avoid these common mistakes, brands need to treat loyalty as a strategic discipline and not a marketing feature. That means starting with an effective loyalty strategy that reflects your audience, industry, and business model. It also means investing in the right tools: a unified Customer Data Platform (CDP) that connects the dots across the customer journey, so you can segment, personalize, and act in real time. And just as crucially, it means having a team of experts  that understands the data, monitors performance, and continuously evolves the program to keep it relevant and profitable.

• Need a loyalty partner who truly gets it?  Talk to our team of experts.