Week 3

As this week?s assignment charged the class with 1) identifying three customer loyalty programs with which we are familiar and 2) elaborating on how the organizations representing those programs benefit as a result, the discussion certainly sparked some interesting chatter.

I think the real issue to discuss is where does the CONSUMER stand to benefit in the whole scheme of things? After all, to participate in most loyalty programs, the consumer has to relinquish something of value, right? In retrospect, I wonder who REALLY is benefitting.

And that value, or ?gold? as most marketers would coin (no pun) is personal information about us consumers. Albeit demographic-type stuff, more often than not, we?re still ?donating? our precious data for a relatively small return. So, the question comes to bear, is the exchange of database material that benefits the company ten-fold?at the least by giving them the keys to unlock a world of target marketing possibilities?equal to the value in the program offer they provide to the customer? Of course, this can come in many forms such as frequent flyer programs, point systems, coupons, preferential treatment, exclusive information, memberships, cash back, discounts and the like. Is the relationship between you Mr. Company and me Mr. Consumer really a symbiotic one? Or, is this whole notion of a loyalty program just a means to an end?that is, you win my business?and the buck stops there.

If that?s the case, so be it. It?s ?buyer beware? as it has always been. But, if companies out there?big and small?are really, and I mean are truly interested in deepening the connection with their customers in exchange for a deeper and more loyal commitment?which, in effect, will probably result in a more lucrative Lifetime Value (LTV)?then they had better shape up. As it relates to the PERCEIVED value that customers find in the litany of loyalty programs out there and the REAL value they should deliver, I?ve developed a list?an ode, if you will?to help marketers get better acquainted with the difference between the two. Let?s call?em ?Suggestions for Success.?

So, for all those airlines, credit card companies, supermarkets, musicians, coffee chains, hotels, sandwich shops (yawbuS), hair salons, restaurants, shoe stores, electronics retailers, cigarette companies, car parts retailers, movie stores, book stores, car rental companies, sporting goods retailers, greeting card companies, pharmacies, pet store chains, home goods retailers, and more, here you go?

Jamie?s Top Ten Loyalty Program?Suggestions for Success

1. Stop charging royalties for loyalty. I shouldn?t have to pay (literally) to become a member of your loyalty program. What we consumers are giving you Mr. /Mrs. Company is virtually priceless. Remember, it costs more to gain a new customer than it does to retain a regular one.

2. Know your audience. This is for you Mr. /Mrs-supermarket-chain-that-I-won?t-mention-but-is-very-popular-in-Southern-New-England-and-rhymes-with-Slop-n?-Swap. If you?re going to make me an offer to become part of a loyalty program, know who I am and what I?d be inclined to respond to. Don?t spit out a coupon at checkout for a 10 cents-off of one of your branded gas stations when the nearest one to me costs 10 times more to visit than what your silly coupon will ?save? me.

3. Make the reward rewarding. Offer REAL rewards, not petty discounts disguised as rewards. Meaningful rewards will motivate customers to sustain their loyalty to your brand. If you Mr. /Mrs. Company don?t find the ?reward? rewarding, why would I?

4. Become intimately familiar with important terms. Look up the following: ?target,? ?customer,? ?loyalty,? ?reward,? ?value,? and ?commitment,? to start. If you truly understand what these words mean, you may change how you use them when preaching and in practice.

5. Limit limited offers. Remove the ?use bys,? ?good untils,? ?offer expires? and the like. If you?re offering a program, take the pressure off me to use it by a certain date. This is a turn-off and is much easier for me to seek out your competitor?s offer instead. Take heed or I quickly flip the brand-switch to the ?on? position.

6. ?C? is for consistency. This one goes for you Mr.-popular-?fresh?-nationwide-sandwich-chain-whose-first-syllable-rhymes-with-?hub?-and-whose-second-rhymes-with-?day?. Be consistent across the entire brand. If you?re going to institute a loyalty program at one location, do so in others regardless of the fact that they may be franchises. I?m not stupid. I know that the brand represented is still the same, right Hilton (Hilton Honors)? I guess the question is how much are you willing to pay attention?

7. Embrace your employees. And by that I mean treat them well. Loyalty program or not, they are your brand?s front-line ambassadors. I want to be able to express my loyalty to someone whom I feel comfortable with?not someone who wants to blow the place up. Rock their boat for whatever reason, and they can rock your brand?and not in a good way.

8. Don?t take loyalty for granted. Just because I live within one mile of your establishment, or perhaps you?re the only game in town (right now, anyway) don?t presume you?ve ?got? me. You may be getting my business merely on account of convenience. While you?ve got my attention, you may want to take steps to enhance our ?relationship.

9. Sometimes more is less, is more. Loyalty can simply be built by using the infamous punch card. And that?s okay by me. Why would I enlist the services of another if I?ve got a perfectly good reason to stay?

10. Choose your partners wisely. Be wary of whom you choose to share loyalty programs with. There?s nothing worse when I encounter a bad experience with your ?partner? who demonstrates how they successfully birthed their customer service baby in a toilet. Bad choices can be perceived as poor judgment. Who wants to be loyal to that?

Your thoughts and/or suggestions for success are certainly welcome!

-J