Deciding when a loyalty programme is not the right solution

Pause a proposed loyalty programme if there is no repeat behaviour worth encouraging, no benefit customers could realistically use, or no reliable way to deliver the promise. Identify which condition fails, then fix the underlying problem, revise the offer or stop the proposal before asking customers to join.

Is there a return journey?

A repeat-purchase reward needs a plausible next purchase. Check the time between eligible purchases and how many customers return. If the need is naturally rare, an accumulating points balance may sit unused for a long time. That weakens the case for a reward aimed at frequent visits, though it does not rule out every customer benefit.

Ask what the customer would do differently because of the offer. Without a credible answer, the programme lacks a clear purpose. A follow-up service, useful reminder or improved purchase experience may be more direct options to evaluate; none is a guaranteed fix.

Is a service problem driving customers away?

Review complaints, returns, cancellations and service contacts alongside purchase data. If customers report unreliable stock, confusing delivery or unresolved support issues, an incentive could bring them back to the same experience. Assign an owner to the service problem and check whether it improves before adding a recurring promise.

A programme is also a poor substitute for a clear product or price proposition. If the advertised benefit relies on exclusions that make it rarely usable, simplify it. In Australia, the ACCC accepts reports about possible misleading or false claims and can require businesses to back up claims they make about their products or services.

Can the business afford and fulfil the benefit?

Sketch an ordinary member journey and one with high benefit use. Include rewards, fulfilment, staff time, software and support. An offer that is affordable only when members do not use it is a weak promise. If a tier or paid membership offers priority service, check appointment or staffing capacity when many members qualify.

Do not assume a fee or existing member spending will cover these commitments. Use your own figures to set a viable cost boundary before inviting anyone to join. If you cannot estimate the cost and capacity needed to honour the offer, delay the launch and narrow the proposal until you can.

Can the team apply the rules?

Staff should be able to identify a qualifying purchase, see an entitlement and correct an error. The business should be able to explain what happens after a return or an unavailable reward. If online and store records do not align, resolve that path before promising a shared balance. These are pre-launch checks, not tests claimed to have been completed.

Review the enrolment data as well. For organisations covered by the Australian Privacy Principles, collection of personal information must be reasonably necessary for their functions or activities. Define what is needed for the proposed benefit before adding fields to a form.

Decide: proceed, revise or stop

Use a short decision record:

Proceed when the answers support the stated promise. Revise when a weak element can be repaired. Stop when the benefit depends on implausible customer behaviour, unavailable capacity or costs the business cannot support.