The most common mistake brands make with loyalty program rewards is testing them like they're just another discount. The goal isn’t just a momentary lift in conversion, it’s building a real asset. On an episode of Ecommerce Coffee Break, Noah Tucker points out that many brands fatally confuse loyalty programs with referral programs. The goal of loyalty is retention and improving the lifetime value of your customers, he says, not just short-term customer acquisition. People fall into this trap because acquisition is easier to measure. It costs them profitability, as they end up rewarding one-time deal hunters instead of cultivating repeat buyers. The fix is to A/B test rewards that specifically encourage a customer's second or third purchase. Jason Anderson mentioned on the Up Arrow Podcast that you need to be intentional about that journey, using rewards to create goalposts that make customers feel seen and valued for their continued business.
Another frequent error is testing insignificant variations, like offering 100 points versus 110 points for a purchase. This happens because it’s easy to configure in a loyalty app, but it generates noisy, meaningless data. You learn nothing about your customers’ real motivations. Dastan Chikeev, speaking on Ecommerce Coffee Break, makes the case for testing more creative and strategic rewards. He suggests things like specialized in-person experiences, early access to new products, or free tickets to partner events. These are the kinds of emotionally-driven benefits that create true loyalty. The small change is to stop testing minor numerical differences and instead test entirely different categories of value. Test your standard points system against exclusive access to a product drop or a members-only experience to see what actually moves the needle on customer sentiment and repeat purchase rate.
Running the same test for every single customer is another pitfall. Your newest buyers have different needs and motivations than your established VIPs, but brands often test one reward variant across their entire customer base out of convenience. This gives you blended, unhelpful results. On the Modern Retail Podcast, ButcherBox’s Reba Hatcher shared that they use a two-tiered loyalty program and extensive customer segmentation to personalize offerings. That’s the right way to think about it. Aaron Cowper made a similar point on the 2X eCommerce Podcast, arguing that you have to segment your customer base to tailor the experience. The solution is to design separate tests for separate groups. Test what reward best converts a first-time buyer into a second-time buyer, while running a different test to see what makes your top 10% of customers feel the most appreciated.
The final mistake is focusing entirely on the reward and ignoring how it’s communicated. You can have the most compelling reward in the world, but if it’s presented with dry, uninspired messaging, it will fall flat. Brands get caught up in the mechanics of the offer and forget that the marketing is half the battle. As Matthew Barnett explained on The eCom Ops Podcast, A/B testing should be used to optimize your personalized messages, not just the static offer. You need to test the whole package. This means pairing your reward test with a messaging test. Try framing a reward with aspirational language about community and belonging against a simple, transactional message. You might find the words you use are more powerful than the points you give away. Successful reward testing doesn't just find a winning offer; it teaches you what your best customers truly value about being part of your brand.
