The main threat for the efficiency of loyalty programs is the particular business line of the company. It may occur that the operation of the loyalty program i.e. the advertisement and marketing expenses, the loyalty cards along with the granted discounts, do not result in the profits that they should, by definition, bring to the company. That is why market analysis must precede the implementation of the loyalty system. The results will tell the company whether it is a good idea to make such an investment. Loyalty programs may fail especially in the case of low-margin and high-competition industries. Another aspect is the method of building customer loyalty. A company must put a lot of emphasis on the various strategies and original solutions so that its customers do not yield to the temptation of joining the competition.

Egeria Leasing