How to reverse drops in performance in Loyalty Programs

January 24, 2026

Drops in performance in loyalty programs are more common than they seem. Even well-structured initiatives can lose traction over time, whether due to changes in consumer behavior, excess irrelevant communications, or lack of evolution in the value proposition. The good news is that these signals do not represent the end of the program, but rather a clear opportunity for strategic optimization.

Next, we explore the main ways to recover engagement, increase recurrence, and restore the prominence of your loyalty program.

Reevaluate the program’s value proposition

When adoption and usage decline, the first point of attention should be the core proposition of the program. Key questions need to be answered honestly:

  • Are the benefits still perceived as relevant?

  • Is the effort to accumulate and redeem rewards worthwhile for the customer?

  • Does the program differentiate itself from competitors or has it become generic?

Programs offering distant, unclear, or low-attractiveness rewards tend to lose public interest quickly. Updating the benefits portfolio, including immediate rewards and working on experiences beyond discounts, usually creates a direct impact on performance.

Use data to personalize journeys

One of the biggest mistakes in loyalty programs is treating the entire customer base the same way. Behavioral data, purchase frequency, average ticket, and preferences are strategic assets that need to be explored. By segmenting the base and creating personalized communications, the program stops being just transactional and becomes part of the customer’s journey. Personalization increases open rates, redemptions, active participation, and also reduces churn.

Simplify rules and communications

Complex programs drive customers away. Extensive regulations, confusing mechanics, and overly technical communications create friction and demotivation. Therefore, it’s essential to review the rules for point accumulation, eligibility criteria, and redemption processes. The simpler and more transparent the operation, the higher the adoption. Communication should be clear, objective, and recurring, always reinforcing the value the customer is accumulating.

Activate the inactive base strategically

Inactive customers should not be ignored. On the contrary: they represent an opportunity for recovery at a lower cost than acquiring new consumers. Reactivation campaigns can include limited-time point bonuses, personalized offers based on history, and “we miss you” communications with emotional triggers. The key is to create a sense of urgency and real value, avoiding generic approaches that tend to be ignored.

Monitor indicators and continuously optimize

Loyalty programs are not static projects. They require constant monitoring of indicators such as adoption rate, usage frequency, redemption percentage, and participant’s Lifetime Value. With these data, it’s possible to identify bottlenecks, test new mechanics, and quickly adjust what isn’t performing. Continuous improvement is what separates mediocre programs from truly strategic ones.

Conclusion

Drops in performance in loyalty programs should not be seen as failure, but as clear signals that the customer has changed and the program needs to evolve accordingly. With smart use of data, personalization, simplification, and focus on perceived value, it’s possible to turn a stagnant program into a powerful retention and growth engine. The right technology and a data-driven strategy make all the difference in this process, and this is exactly where Smartbis acts as a partner for brands seeking to go beyond traditional loyalty.



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