I have managed to build up a nice collection of loyalty cards from a variety of retailers, coffee shops and others. All probably seemed like a good idea when I took them, but in reality I just don’t follow through with them. They end up floating around in the glove box, bedside drawer, or sitting at the bottom of my office tray.
I am willing to bet that I’m not alone and many of you have a dozen or so of these loyalty cards stashed away somewhere that have never again seen the light of day.
If that’s the reality, then why do so many businesses turn to these programs in an effort to gain loyalty from their customers?
Why do they do it even though they know their “Get Every 5th Coffee FREE” card will probably end up at the bottom of a drawer along with a few pocketfuls of loose change and some odd socks?
Founder of SageBerry Consulting and former VP of Marketing at Neiman Marcus, Stephen P. Dennis writes in an article “The World’s Best Loyalty Program”, that many of these loyalty programs are simply a front for collecting customer data.
That’s quite likely true for some of the big corporate rewards programs, but what about the small businesses that do it?
In the article, Dennis cites another reason that these programs have become popular which probably answers that question. They are “me-too efforts that are knee jerk reactions to the competition which end up raising the cost of doing business without engendering true loyalty”.
So, if bribery doesn’t work, then what does?
Since I am a big fan of coffee let’s stick with that example. If you run a coffee shop, here are some ideas that would make me love to get my coffee from you on a regular basis without you having to give me every 5th one free:
- Serve great tasting coffee and food in a timely fashion.
- Provide a table that allows enough personal space to relax and enjoy my coffee and food and have a private conversation if I am with someone.
- Have your staff provide their service with a warm and friendly demeanour.
- Serve my coffee with 100% of it still in the cup and not running down the sides into the saucer.
- If my order comes to less than $10 and I don’t happen to have any cash on me, don’t force me to buy something I don’t want in order to use your EFTPOS machine.
Just a few ideas there, but what is the common thread?
If you provide an experience to your customers that they can’t get anywhere else, they will keep coming back. In the example above the suggestions would seem like basic things but are apparently very hard for some to do. The same can be said for many other types business as well. They are focused on all manner of gimmicks and so-called ‘innovations’ but fail time after time to do basic things properly.
As Dennis points out in his article, there are many reputable brands that have built incredible loyalty from consumers without any type of loyalty or rewards program because their value proposition is on the mark, and they just get things right consistently.
The reality is if I have an average or bad experience, it won’t matter to me in the slightest if I get every 5th coffee free or 10% off my next purchase. There’s no value in it and it will actually seem like hard work to get it.
On the other hand, if I know it’s going to be an awesome experience when I come in to your place then it won’t matter to me whether I get every fifth coffee free or a 10% discount. The loyalty program becomes irrelevant.
The best customer loyalty program in the world is having systems and a culture that ensure you consistently meet and exceed your customers’ expectations.
Owner, Wise Words Communications