5 signs your C-suite doesn’t understand customer loyalty

Loyalty programs can be powerful assets for driving revenue and fostering deeper customer relationship—but only if the C-suite understands their true value. When executive leaders are aligned with loyalty initiatives, it means more support, investment, and success.

However, if there’s a disconnect with the C-suite, it can result in missed opportunities, ineffective strategies, and ultimately, a failure to maximize the impact of loyalty initiatives on overall business goals.

Here are five signs your executive leaders don’t understand the value of customer loyalty:

1. They prioritize immediate sales over long-term customer relationships
2. They ignore loyalty data
3. They rely on outdated loyalty structures
4. Their expectations don’t align with customers
5. They don’t make the investment

1. They value the fast sale over relationship building

One of the most telling signs that your C-suite doesn’t understand loyalty is an overemphasis on short-term revenue boosts at the expense of building long-term customer relationships. This narrow focus can severely undermine the effectiveness of loyalty programs and lead to missed opportunities for deeper customer engagement.

Consider this scenario: A brand launches a temporary discount campaign that boosts sales, but also leads to massive customer churn after the promotion ends. While the immediate sales figures look impressive, the company failed to convert these one-time buyers into loyal customers.

Or take a company that always prioritizes meeting quarterly sales targets, but doesn’t invest in loyalty initiatives that could have fostered deeper customer connections for more steady, predictable revenue over time.

True loyalty goes beyond transactional relationships. It’s about creating emotional connections with customers and making them feel understood and valued.

When executive leadership fails to value deep customer relationships, they miss out on sustained business growth. Investing in strategies that foster long-term customer relationships can lead to:

• Increased customer lifetime value
• Higher customer retention rates
• Better word-of-mouth marketing through brand advocates
• Reduced marketing costs over time

2. They don’t factor loyalty data into their decisions

When the C-suite doesn’t integrate customer loyalty data into their business decision-making processes, it’s a clear sign they don’t fully appreciate the value of loyalty programs. Without this, your brand is essentially flying blind to the true motivations and preferences of customers.

Operating in data silos leads to inconsistent customer experiences across channels. When loyalty data isn’t shared across departments, it becomes impossible to create a unified view of the customer.

The power of loyalty programs lies not just in collecting customer data, but in gaining insights from it. When executives don’t prioritize analytics, they miss out on opportunities to enhance customer engagement and retention strategies.

For instance, a company that fails to analyze customer purchase data might miss crucial trends that could inform not only marketing efforts, but also sales strategies, product development, and customer service initiatives. By using loyalty data, businesses can:

• Identify high-value customers and tailor experiences for them with advanced segmentation
• Predict customer behavior and preferences
• Optimize reward structures and program offerings based on redemption data
• Measure and improve program ROI

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3. They use old loyalty structures

Using outdated loyalty frameworks is an indicator that the C-suite isn’t keeping pace with evolving consumer expectations. This can lead to disengagement and put the company at a competitive disadvantage.

For example, a business using an on-prem loyalty solution without the flexibility to integrate with new channels can’t provide the omnichannel experience customers today expect.

Similarly, a brand that still relies solely on a static points system without offering any experiential rewards that cater to their customer’s preferences may find its program failing to engage large segments of customers.

The reluctance to adapt loyalty programs to changing market conditions is often rooted in a lack of understanding at the C-suite level. This resistance to change can have serious consequences for customer satisfaction and retention.

4. They’re not focused on the customer

When loyalty programs fail to cater to customer needs and preferences, company leaders aren’t prioritizing a customer-centric approach. Putting the customer first ensures that loyalty programs are aligned with their needs, driving engagement, satisfaction, and ultimately, profitability.

A loyalty program that doesn’t offer relevant rewards that provide clear value for its members will turn off customers. Similarly, a brand that doesn’t consistently seek customer feedback can’t align their offerings with customer needs.

Loyalty programs can only be effective with personalization. The C-suite may think personalization is a box to check off, but they don’t understand how a sophisticated approach to personalization can drive business objectives.

Many retailers make the mistake of sending generic promotional emails to all customers, failing to recognize individual preferences and behaviors. Lack of segmentation can lead to missed opportunities to engage different customer demographics effectively.

To boost personalization, companies should explore innovative ways to gather zero- and first-party data, like sweepstakes and gamification, and tailor experiences through segmentation.

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5. They don’t make the investment

Underfunding can limit the development and innovation of loyalty initiatives, leading to stagnation and reduced effectiveness.

While it’s important to consider short-term costs, executive leaders also should recognize the potential long-term ROI of effective loyalty programs. Investing in loyalty can lead to increased customer retention, higher customer lifetime value, and ultimately, sustained business growth.

Beyond financial investment, the C-suite needs to dedicate staff to support loyalty efforts and align business and loyalty goals.

By creating a shared commitment to customer loyalty, organizations can break down silos, leverage diverse perspectives, and ensure that loyalty initiatives are fully integrated into the overall business strategy.

Bridging the gap

Recognizing these signs is the first step in addressing the disconnect between the C-suite and loyalty program objectives. Loyalty managers play a crucial role in advocating for a deeper understanding of loyalty’s strategic value within the organization.

To bridge this gap, consider the following steps:

1. Regularly share loyalty program insights and success stories with leadership
2. Use concrete metrics and ROI calculations to demonstrate the value of loyalty initiatives.
3. Advocate for investments in modern loyalty technologies and strategies.
4. Encourage a company-wide focus on long-term customer relationships.
5. Organize workshops or presentations to educate executives on modern loyalty concepts and involve them in strategic loyalty decisions.

With everyone on the same page, loyalty programs get the support they need to reach their full potential for driving the kind of customer engagement that leads to long-term loyalty, more sales, and ultimately, business success.