Building a sustainable loyalty program, a lesson learned from
31 May 2022
Scott Harrison faced a great deal of community backlash when it announced changes to its popular CRO Card Rewards program.

The program changes included a reduction in rewarded cashback, the introduction of a monthly cap on the cashback, and the phasing out of staking rewards. Essentially, a significant reduction or complete removal of core program benefits which deliver value to members.

Most comments online were negative and critical of the move, with the price of’s native CRO tokens dropping by 11% within hours of the announcement. cited the move as necessary ‘to ensure long-term sustainability’ of the program, but the surprise and almost immediate impact on members (aka investors) was not viewed favourably.

The company backtracked on some of the reward program changes the next day. CEO Kris Marszalek acknowledged the ‘really vocal’ community and announced a revision of the changes, with a more modest reduction of the cashback rates and staking rewards. The benefits are still less than the original offering, especially for lower tiered members, but slightly more balanced than the initial announcement.

Designing a sustainable loyalty program has been widely recognised in the crypto community for an attractive and generous rewards program – a primary driver for early adopters. The company has also been highlighted as an exemplar of how companies can use value to build a bond with customers, but the controversial changes and ensuing criticism has left many long-term supporters disappointed.

The key issue was the quick and abrupt slashing of rewards without prior notice, leading many to question the viability of the product and the company’s respect for members. It was widely accepted that the generous rewards were unlikely to remain forever, but at least be gradually phased with consideration for investing members – the company’s strongest advocates.

It is admirable when any company can acknowledge a mistake, but it is difficult to fully rectify the damage. The breakdown of trust and subsequent loss of many long-time members may have been avoided with earlier customer research, input and discussions.

So, what can brands learn from

Involve customers in the evolutionary process

Loyalty & Reward Co are strong proponents of programs being evolutionary – best-practise loyalty programs have a roadmap which is always optimised based on learnings from members. Sephora’s Beauty Insider is an example of a program which is constantly being developed, updated and evolved to meet the changing needs of customers – a true investment in long-term loyalty.

Start small and grow

A company launching a new loyalty program must recognise that the ongoing operational effort required to make the necessary adjustments to optimise member engagement cannot be overlooked. Insufficient funds and resources allocated to a program will cause a brand to fall short of member expectations and lead to disengagement, while too much funding and resources will not be commercially sustainable. Achieving balance is critical.

Optimise for value

Value is the cornerstone of every loyalty program. A customer will join a program because of the promise of value. And the customer will only continue to engage with the program if they perceive they are accessing meaningful value. Value is important because it develops ‘stickiness’, which is where customers maintain their relationship and concentrate spend with a company because of the perception they are accessing a consistently better value proposition.

If the customer is not considered in the design (or redesign) process, a program will struggle to deliver the value required to engage members. If too much is given away too soon, there will not be a sustainable program in the future.

<a href="" target="_self">Scott Harrison</a>

Scott Harrison

Based in New York, Scott Harrison is a Principal Consultant at Loyalty & Reward Co, the leading loyalty consulting firm. Loyalty & Reward Co design, implement, and operate loyalty programs for global brands. Scott is a customer experience and digital marketing specialist with extensive experience in loyalty, CX, member engagement and lifecycle marketing. He has worked with world leading brands including Australian Venue Co, McDonald’s, Schneider Electric, UEFA and Visa. Scott co-created the book Loyalty Programs: The Complete Guide, the most comprehensive book on loyalty program theory and practice available. He also regularly writes and presents on loyalty, gamification and the application of Web3 on engagement.

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