How to Prevent and Mitigate Backlash from Loyalty Program Changes

A number of notable brands, including Sephora, Target and Pampers have recently rolled out changes to their loyalty programs. These changes have not been received positively by consumers. Many members of Sephora’s Beauty Insider Rewards Program have threatened to take their business to Sephora competitors like Ulta. Consumers took to Facebook to voice their frustration with Pampers’ new app. One consumer posted, “This new app is a joke right? Pampers really dropped the ball on this one!!!! Epic app launch fail award goes to Pampers!!!!!” These sentiments raise an important question: What can brands do to prevent or mitigate backlash when implementing a loyalty program change members won’t receive favorably?

We wrote this blog post to help marketers make the process of navigating and preparing to roll out loyalty program changes a little smoother. Keep reading to learn more!

Why make changes to your loyalty program?

Before diving into the subject of backlash prevention and mitigation, it’s important to spend a moment addressing the question–why make changes to your loyalty program? Brands have loyalty programs in order to motivate customers to shop with their brand instead of a competitor’s, to spend more with their brand, and to spend with their brand more often. Yes, there is a desire for the program to build goodwill with customers, but it has to make financial sense for the business. Brands sometimes have to make changes to their loyalty program in order to fix poor design or financial modeling.

Consumers sign up for loyalty programs in order to receive rewards and cost savings for shopping. With most loyalty programs offering some type of incentive after a certain amount of money is spent, consumers have understandably come to feel entitled to those perks. It’s no surprise that despite a rise in loyalty membership program enrollments, active participation in programs is falling, according to eMarketer. Taking something away from consumers is never received well, but ironically, it can be necessary in order to reset the program to make it better for both customers and the business.  

How can retailers prevent or minimize backlash when they make a change to their loyalty program?

If you’re making any type of change to your loyalty program you can anticipate that at least some portion of your customers are not going to be happy about it. Here are a few measures brands should take in order to prevent or minimize backlash from loyalty program changes:

Communication Strategy

• Communicate to members before, during & after. Detail the milestones
• Outline the steps it takes to leave the old program and how to join the new program
• Explain why the program is changing. Find and articulate the benefit to the member without totally avoiding the corporate benefit
• Give your Customer Service Team scripts. Make sure they learn them and are comfortable with them prior to launch
• FAQs should be drafted and proactively pushed to members via e-mail, web etc., and not buried in the T&C’s
• Message to internal employees and vendors with consistent messaging. Help them understand that there will be negative feedback, and the reasons for the program change
• Be transparent with your members
• Give your loyal members something extra for staying

Train Your Team

• Leading up to the change, train the teams on the new program
• If they understand how the point economy works and the benefits to the member, they will be more confident in answering questions and responding to feedback
• Provide them with FAQs & Documentation on the change
• Role play leading up to the launch

Test & Learn

• Based on engagement activity tweak points as needed (while always keeping an eye on ROI)
• Ask members for feedback
• Keep engagement and earning opportunities fresh. Optimize based on performance
• Roll out new perks and rewards every 6-8 weeks. Bring back popular ones

Change can be hard, especially for entitled consumers. But sometimes making changes to your brand’s loyalty program is a necessary measure to take to ensure it makes financial sense and effectively drives business outcomes like increased purchase frequency, recency and basket size. With the tips and tricks we’ve outlined here, you’ll be prepared to roll out changes to your loyalty program and take on and tamp out backlash with haste and precision.