In our benchmark loyalty study – For Love or Money 2015, we observed a slight improvement in defection from loyalty programs vs the 2014 study.
Defection decreased from 26% (2014) to 22% (2015) .
Whilst this is trending in the right direction (down), it still provides a sobering reality… these members are leaving a program and therefore the brand.
Of the 22%, 18% simply stopped participating – the passive impact and the other 4% formally asked to be removed – the active impact. Whilst the latter can potentially be rescued (you have the opportunity to have a dialogue), the former are passivly leaving, not asking just clicking/walking away.
No matter how they leave, do the numbers: Your member base = 100,000 (say) x 22% defection = 22,000 x ave sale = dollars down the drain!
Whilst this scenario is hypothetical, what would it mean to you if 22% of your members defected from your program and therefore your brand?
It might help if you know why and here are the reasons why they defect…
It also might help if you know who leaves for what reason…have a look at this demographic analysis.
If you know why and you know who, then what plan do you have in place it review and revitalise your program so that you can reduce defection?