Common Loyalty Program Pitfalls and How to Avoid Them

In my conversations with loyalty experts, I’ve encountered a few ideas that seem great on paper but often lead to big mistakes in practice. Here are some of the most common pitfalls:

🏆 Copying Winning Programs

In some areas of business, modeling the winners can be a solid strategy. Why reinvent the wheel, right? Programs like Sephora’s, Domino’s, and Starbucks’ are well-known for a reason—who wouldn’t want to follow in the footsteps of proven success?

However, this approach can skip over essential questions, like what specific business problem the loyalty program is intended to solve. Copying another brand’s program can lead to biases that prevent valuable customer insights and overlook the unique needs of your own customer base.

📈 Expecting Immediate ROI

Many businesses with stable, predictable revenue streams expect any investment to yield a quick return. If there’s already a way to generate reliable ROI within 6–12 months, why wait longer to see results from a loyalty program?

The reality is that most loyalty programs take time to show returns, especially if they rely on customers reaching certain statuses or earning enough points to unlock rewards. If it takes customers 9 months to qualify for a reward, expecting ROI in the first few months is unrealistic—most participants haven’t even completed a single redemption cycle yet.

👥 Launching a Loyalty Program as a Solo Project

Gaining buy-in across multiple departments can be challenging, so some companies try to label loyalty programs as “tech initiatives” or outsource the work entirely, hoping that broader company investment can follow once the program gains traction.

In practice, though, I haven’t seen this approach succeed. Loyalty programs need cross-departmental buy-in from the start because they rely on coordinated efforts across customer service, marketing, operations, and more. Avoiding those early discussions often leads to limited engagement and underperformance.

Join the conversation on LinkedIn

What other “nice” sounding loyalty ideas have you encountered that didn’t deliver as expected? Join the conversation on LinkedIn—share your experiences, challenges, and insights. Connect with us at Shrine Development, or reach out directly to me here.

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