Customer Loyalty Programs: Some Do’s and Dont’s

I knew I had a couple loyalty program cards around somewhere. It turns out this wasn’t even all of them.

Let’s face it everybody has some flavor of loyalty program these days. Almost every last one of them is designed to do the same thing: get you to come back to buy more. Airlines, hotels, grocery stores, restaurant chains, they all have something to offer.  In fact the notion of a loyalty card or membership card is so pervasive we almost take them completely for granted.

So how do you rise above that mess on my desk?

1. Don’t assume: just because they come back doesn’t mean they’re loyal.

Loyalty programs are funny beasties. On the one end you have people who love you and WANT to come back. In the middle you have people who feel they OUGHT to come back, they’re more loyal to attaining the next level than doing business with you specifically. On the far end you have those who feel that they HAVE to come back because that’s where they have all their points.

I confess I’m typically of the ought to variety. Old Chicago’s World Beer Tour is one of the loyalty programs to which I am most loyal. I’ve completed the tour twice and am working on my third trip. But that doesn’t drive me in there any more often. It just makes me mad when I forget to bring my beer card.

DO pay attention to whether your loyalty customers are WANTs, OUGHTs or HAVEs.

2. DON’T forget: Loyalty and Appreciation are close relatives

Most loyalty programs include discounts. I’m becoming less of a fan of discounts because they seem to speak to value. I rather like the Chick-Fil-A approach, if they’re going to give you something they’ll give it to you for free. They aren’t going to comment on the value by discounting.

While discounting does make me feel appreciated as a customer it’s really just price manipulation. I’d rather get “something else”. Maybe it’s a particular set of items only available to members, even the standard “tenth one is free” is ok.

Even better though I’d like you to tailor offerings to how I do business with you. For example, United Airlines should know by now, after hundreds of thousands of miles, that I will do whatever I can to get an aisle seat. What if in knowing that preference they offered me priority aisle seating? Not only would I feel appreciated, I’d feel like they knew me.

DO appreciate your loyalty customers by showing that you know them.

I could go on for quite some time on this topic, and probably will. For now though ask yourself two questions:

1. How do I get my loyalty customers coming back because they love us rather than because they are after the next point level?

2. Do I know my loyalty customers well enough to appreciate them personally?

More to come…

In some industries it cost cost as much as five to ten times as much to get a new customer as it does to keep an old one. What are you doing to keep your old ones? What does loyalty look like in your customer base?

 

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