3. But are these points valuable at all?

They kind of are.

The 2017 Colloquy Loyalty Census Report found that membership in loyalty programs grew by about 15 percent between 2015 and 2017. It’s worthy to note that the growth rate recorded in 2015 was 26 percent, showing that the growth in membership signups is slowing down. Experts believe that plenitude is at the core of the declining interest of customers. There are simply so many loyalty programs out there that it has become difficult for an average consumer to monitor every loyalty program they are a part of. Moreover, because of the numerous programs, it usually takes longer for consumers to accumulate enough points to benefit from loyalty programs. In a different report from Maritz Loyalty Marketing, 70 percent of surveyed consumers abandon loyalty rewards because it took between six and nine months to accumulate enough points to redeem rewards.

With consumers finding loyalty points less valuable and hence making them not always come back as it was intended, chances are it inherently costs businesses more to sell their goods and services. To make loyalty program deliver on the promise of improved customer retention rate, we simply need to make reward points more valuable to the consumers such that it becomes a no-brainer for them to participate actively.