Loyalty programs need constant investment in terms of communications with customers to ensure that activation levels are high. The activation levels of customers in loyalty programs vary wildly from as low as 10% to as high as 90%. The reasons for a customer to be inactive in a loyalty program could vary.

• The customer could have switched to competition
• The customer may have lost the card and may not be aware as to how to get a replacement
• It may be due to plain lethargy
• The customer could have moved locations
• The customer may find the value proposition not upto his/ her expectation


It is important for the marketer to understand the reason and rectify the same, to ensure that the program remains relevant. Considering that the customer has taken the pains to fill up a form and enroll into the program, it is the duty of the company to go back to the customer and help him/ her, if required, to start transacting.

We have experienced in the case of one of our clients, that a simple letter is all that it takes to activate some of the inactive customers. The customers are segmented into four categories based on their behaviour before becoming inactive and the letters to each of the four segments are customised to address possible concerns pertaining to the specific segments.

The customers were categorized into the following four segments:

1. Those who loaded money onto their card but did not do any sale for 45 days
2. Those who did one purchase through their card but did not buy within 45 days thereafter
3. High value members who did not transact for 60 days
4. Even 60 days after enrolment those who did not transact

The letter sent to them first acknowledges that they are inactive and shows concern that they are losing out on program benefits. The letter then prompts customers for possible reasons for their inactivity and asks them to specify the reason in their individual cases, so that the company can address his or her concern. The letter gives prominently the phone numbers, email addresses and PO Box addresses for the customers to revert back.

With just this simple activity, we have been able to help our client activate 35% of those inactive customers to whom the mail was sent in a particular month. Here again it was found that the response rate was substantially high in the cases of those who had transacted atleast once. This indicates that customers who experience the service once are more receptive to the letters than those who had not. Customers call back or write back giving the reasons for their inactivity and the customers became active once these issues were resolved, whether it was a replacement card that was to be issued or a lost card which needed to be replaced.

Thus with intelligent segmentation and well directed customised communication you can activate a significant chunk of your inactive base thereby adding revenues to your company.