At Collinson, we know loyalty programmes can be powerful drivers of customer retention, revenue growth, and profitability. However, our research shows that many programmes fall short of their potential, with up to 74% operating as cost centres rather than profit centres. Surprisingly, nearly 60% of companies can’t measure incremental profit—a critical metric for proving a programme’s value.
We’ve identified three main challenges that commonly affect loyalty programme profitability:
Measurement and Cost Tracking: Over half of companies struggle to accurately track costs and revenue, which leaves untapped profit on the table. Our ROI tool and analytics are designed to address this, helping to identify up to 10% more profit through precise measurement and optimised cost management.
Data Monetisation: More than 55% of loyalty programmes miss opportunities to monetise customer data with third parties. This also limits personalisation, which in turn reduces engagement and profitability. We believe a strong data strategy is essential for maximising the full value of loyalty.
Reward Structures and CFO Involvement: Programmes that focus solely on discounts often erode long-term profitability. We recommend structuring value exchanges that reward high-value behaviours while bringing finance teams into the fold to ensure loyalty investments deliver measurable returns.
Want a deeper look into these strategies?
We have also developed a powerful ROI tool to help you discover where your programme stands and uncover its true profit potential. Contact us below to get started:
