When Customer Loyalty Programs Don’t Fit
Posted by Becky Carroll on January 15, 2007
Seems that almost everywhere I look, I see the latest “customer loyalty” program. Airlines, video stores, supermarkets, credit card companies… the list goes on. Meanwhile, consumers are busily trying to manage all of their loyalty cards and loyalty program logins in order to take advantage of their promised rewards.
Think for a moment about your company’s customers. Why are customers loyal to your organization? Do you know which ones are truly loyal because they believe in your products and services? Alternatively, do you know which ones carry your “card” just so they can get a discount? The ultimate question: does your customer loyalty program reflect the needs of your customers in such a way that it makes a difference in the loyalty of your customers? In other words, does your loyalty program fit your customers?
Customer loyalty programs should enhance the value of your corporation to your customers and the value of your customers to you. They do this by creating a way of engaging with your customers. A result of your customer’s involvement in the program should be further action on their part with your organization. As marketers, it is up to us to make sure the invitation, as well as the action on the part of the customer, is meaningful and based on the needs of the customer. What we don’t want is for the interaction to register on the customer’s pain threshold meter (as I discussed in the post on Saturn last week).
Kevin Hillstrom of MineThatData wrote a post a few months back about a customer loyalty program gone wrong. The invitation from Hallmark did move customers to action (come into a local store and buy a Holiday Scrapbook at a great discount), but the execution of the program, as shared by Kevin, was a loyalty buster. There were so few scrapbooks available, they sold out within minutes – and you didn’t even have to be in the loyalty program to buy one. This execution leads to customer disappointment at best, possibly leading to the action of leaving the relationship, at worst, when it pushes the pain threshold meter past its limit. Hallmark didn’t understand their loyalty members’ needs to be rewarded with something meaningful and unique to them.
In my email today (and in my husband’s on Friday – he must be further up the list!), I received notification of my JetBlue TrueBlue statement (for JetBlue’s frequent flyer program). Since we moved to San Diego, it is not as convenient for me to fly JetBlue, so I knew there wouldn’t be much useful information on it for me. Here is the text from the email:
Hello REBECCA CARROLL, (comment – love the personalization)
Well, the holidays are over, but a new year has begun!
We suspect your list of resolutions is long enough already, but you may want to pencil in “earning extra TrueBlue points”. You may be really close to flying to Cancun-gratis! Here’s what you’ve been waiting for since last year: Your January TrueBlue statement.
Well, it turns out I have zero TrueBlue points! I am so glad they told me that.
It would be more effective if JetBlue’s marketing department were to customize the member email slightly. Perhaps send one version to those customers who really are close to flying free to Cancun, inviting them to make that last reservation that will help them get there. Then to other non-frequent flyers, they could have sent a version that was more relevant, such as an invitation to check out the great places JetBlue now flies, or a comment that they have missed us and hope to see us again soon. Applying this interaction to the pain threshold meter, the email is pretty low on the pain meter, but it tells me that the left hand and the right hand aren’t talking very often! JetBlue doesn’t understand my needs, which in this case include a more convenient departure airport (they don’t fly out of San Diego).
Looking in my wallet, here are the loyalty cards I carry:
Vons: I carry this one because no one in their right mind would shop at a grocery store without one and be forced to pay the “non-member” price. I’ve been told if you put in your phone number as 123-4567, you can shop without a card (but I’ve never tried it!). I do like Vons, but I shop there mostly because they are convenient. Needs met: price and convenience.
Southwest Airlines: I travel often enough on this airline that I want to make sure I get my Rapid Rewards credit. Southwest is one of the few airlines where it is easy to navigate their program (one credit per flight – miles are not tracked) and easy to earn rewards. Plus, when you get a Reward, they send you a drink coupon book for use on their flights. Needs met: an airline reward I can actually use.
I belong to several other programs, but either I don’t use them often enough to warrant carrying the card around or they have a good way of hooking me up electronically (such as hotel programs).
Customer loyalty program are most effective when they are relevant, drive a customer to an action that furthers the relationship, and are a means of encouraging ongoing dialogue with the customer. Effective programs tend to be designed with the customer’s needs in mind, rather than a thinly-veiled ploy to get customer information for the benefit of the company. A well-executed program will not only get relevant customer information, but it will encourage the type of relationship where customers willingly give the type of information about themselves that becomes a competitive advantage for the corporation.
Which cards do you carry, and why? Is it all about the price? Or do you truly value your relationship with that corporation? Tell us about the customer loyalty programs you belong to that rock and how they satisfy your needs!