Is your Loyalty Program Really A Disloyalty Program?
on 23 June, 2015 at 07:06
I have loads of points accumulated in so-called loyalty programs.
I bet you have too.
But I wonder how many of those companies make you feel special? How many seem to know you well? How many treat you as a person, not just a sale? How many use their data brilliantly – so you get offered stuff they know you’ll probably like. And don’t have your time wasted with stuff that’s obviously not for you?
The debate that raged when I was at University – the good Lord was still in short pants then – is not resolved. (In fairness, some of the best marketers have got it down pat, but a great many still haven’t).
Many still think a pattern of repeat purchasing behaviour represents loyalty.
Now it might. But don’t assume it does.
A lot of the time it’s merely Behavioural loyalty. Often times it lacks the second dimension needed for sustainable loyalty – real share of wallet though share of heart.
That is Emotional loyalty.
Many so-called loyalty programs are either simple bribery or slow-burn sales promotions. Issuing some form of points or credits in return for desired behaviour.
The ‘loyalty’ to these programs is false.
It is loyalty to the currency, not to the brand.
I mostly fly Qantas. I happen to like Qantas. Frankly, I have a mountain of Frequent Flyer points with the airline. Assuming I had no emotional bond with them, I could buy a few hundred toasters with points and move to Singapore Airlines or Virgin.
What has kept me is not the points. It’s my liking for the airline.
That is key. True share of wallet comes from share of heart. Winning share of heart demands both Emotional and Behavioural Loyalty.
More recently, though the Frequent Flyer program has started sending me wine offers. I am not a wine person. I don’t think I’ve opened a single Qantas wine EDM.
They annoy me when they land in my Inbox. Repeatedly.
They prove to me that the airline actually doesn’t know me. Isn’t learning anything about me. And is putting it’s interests before mine.
Our relationship is changing: they are starting to run down all their points in my ‘emotional points account’.
If they continue this way much longer, toasters and their major competitor are going to become increasingly attractive.
Am I saying loyalty/rewards programs don’t work? Not at all.
I am asking those who have, or want to create, a loyalty program to think on this from Jon Ingall:
“Loyalty schemes themselves do not create loyalty. They are simply a means to an end. The primary function of a loyalty scheme should be to provide the company with customer data that can be used to improve its products and services. It is this that, ultimately, will improve loyalty.” [TWEET THAT]
In simple terms, the major reason for a loyalty program is to collect data.
The main reason for collecting data is to help serve customers brilliantly – to ‘know’ them as well as the old corner shop owner used to in simpler times.
That is a powerful way to go beyond ‘surprise and delight’ to devotion.
That is how loyalty programs nurture and retain customers who love you and stay with you forever.
So to my current favourite airline, let me ask this of you: read my data and work me out. Show me my loyalty is well-placed.
Or send me the toaster catalogue when next you send me a wine offer.