Six reasons why Channel Loyalty Programs fail

Six reasons why Channel Loyalty Programs fail

Channel Loyalty ProgramsLoyalty

Channel Loyalty image

Channel Loyalty programs are the critical pillars of sales growth across different sales channels of an organization. The functionalities of the program that are based on Incentive, reward, and engagement programs can directly influence the willingness, interest, and energy of channel partners to sell and support a brand’s products and services.

Channel Loyalty Programs are important

A well-strategized channel loyalty program can positively influence the willingness, and motivation of channel partners to recommend and sell a brand’s products and services. This can help the brand create reliable and long-term revenue with its channel partners.

According to the Incentive Research Foundation, more than 80% of distributors confirmed that the opportunity to get rewards from the supplier is a critical factor in their purchase decisions.

The study also showed that non-cash reward programs increase market share by 30% and about 81% of the top-performing companies are deploying these reward programs via a loyalty platform to incentivize their channel partners.

But why do Channel Loyalty Programs Fail?

For a loyalty program to work, it must be well planned, properly supported, and actively promoted. In short, it must be a long-term and ongoing commitment.

But, sometimes, loyalty programs fail and they do not produce the expected result for a company.

Let’s have a look at the vital factors that causes the breakdown of channel loyalty programs.

1. Lack of commitment

For a loyalty program to work, it must be well planned, have stakeholder buy-in, should be promoted extensively, and should be communicated properly. Channel loyalty programs should be focused on making sure partners are committed long-term, and also render immediate gratification.

2. Lack of personalization

If a brand operates a complex supply chain featuring distributors, dealers, influencers, sub-dealers, retailers, etc, it’s important to customize the rewards and incentives for each segment making it relevant for the target audience. A differentiation in partner behavior should also be taken into account. For instance, it could be different for a distributor than a reseller.

3. Not setting measurable goals

Attaching measurable goals like an increase in sales, revenue, or market share to a channel loyalty program ensures its success. Understanding a channel partner’s goals and motivations to sync business goals with that of the partner is equally important, which further helps in creating a symbiotic partnership.

4. Complex program structure

A seamless channel loyalty program helps in engaging channel partners. Hassle-free signups, listing out rewards and T&Cs upfront, and most importantly, ensuring points and rewards are easily attainable, are some criteria that should be looked at while creating the program.

5. Not leveraging data 

To ensure the success of a program, it’s imperative to constantly check the participation and redemption rates along with its sales pipeline contribution. Tracking the progress of a channel loyalty program uncovers potential upsell/cross-sell opportunities for specific regions.

6. A set it and forget it approach can be disadvantageous

Brands must promote their loyalty program throughout, and not just at launch. Treating loyalty programs as autonomous entities that can function on their own once it is launched leads to their failure. The primary reason is that several brands are vying for the attention of the same partner. Therefore, leveraging agencies or a third-part source is advantageous for a brand to run its loyalty program smoothly for the long haul.

Avoid the pitfalls, and make Channel Loyalty Programs effective with BigCity

Right from relevant incentives, to how the loyalty program will integrate with company and channel requirements, as well as adhere to the legalities of the different Indian states, BigCity has curated unique Channel Loyalty Programs.

In our experience, a great channel loyalty program needs the following:

  • An adaptive strategic approach that ensures key business goals are met.
  • A comprehensive & visually appealing communication pipeline that removes ambiguity at every level.
  • Intuitive & approachable technological implementations to deliver a seamless customer journey.
  • Last but definitely not the least, exciting rewards that motivate audiences to engage with the platform.

Our loyalty programs are tailored to be engagement-led as well as reward-relevant based on insights derived from over 15 years of promotional & loyalty experience with innovative ideas and the integration of technology and AI.

To execute an ROI-driven channel loyalty program that is motivating, engaging, and helps in fulfilling your business goals, reach out to BigCity experts at

Channel Loyalty ProgramsLoyalty

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