It’s only loyalty when you remove the bribes
A study by consulting group Capgemini highlights that the vast majority of companies have a somewhat misguided view of loyalty. With so called ‘loyalty programmes’ that are summed up as “you spend money, we give you a perk.” Not caring so much about how they could make their customers lives better by engaging and listening to them, but simply caring about how much and how often they buy. Serving the needs of the company, not the needs and preferences of their customers.
True loyalty has little to do with a purchase or transaction. It is a happy by-product of someone’s strong feeling for a brand, company, product or service. Something only developed by helping people, solving their problems and making their lives better. By delivering an exceptional service and experience - and importantly, making it right if you don’t.
US Car manufacturer Saturn built a powerful brand from scratch driven by the customer, and the results were truly staggering. They touched people’s hearts, bonding with owners. Their ‘homecoming events’ were legendary, leaving customers smitten by the way they were treated by this little car company. They were rewarded by an unprecedented level of customer loyalty and brand advocates. One owner heard to comment: ‘We are all a bunch of walking ads’.
Yes, you can win a customer by offering a discount or some other perk. But that isn’t loyalty - that’s bribery. Something which only lasts until another company offers a better bribe! Great companies understand this - that loyalty is about building relationships, having real conversations, listening and learning more from their customers than just their purchase history.
Truly loyal customers don’t simply switch to a competitor to save a few pounds. Loyal customers are happy to pay you a premium if necessary, just for the experience of doing business with your company, and the results you deliver for them. If you listen, loyal customers are willing to take time to help you improve your product and service, and to bring you many new customers through their recommendations and referrals.
Many on social media believe that loyalty is measured in the number of followers, friends, subscribers and likes. However a marketing stunt by Burger King which offered a coupon for a free Whopper if you unfriended 10 people on Facebook showed the reality of this, and that the value of a ‘friend’ was less than 50 cents. Within days of the campaign starting over 234,000 Facebook users we de-friended. So much for loyalty on social media.
Whilst incentives may help to acquire new customers in the short-term, you had better hope that you have a plan to engage with them to establish an on-going, positive relationship, as in the long-term there is no better incentive than a great product and amazing service.
When you have to bribe a customer to do business with you and call it a loyalty program that is delusion of the highest order. However, to use incentives to get attention, to draw new customers to you from which you can then open meaningful dialogue to develop truly loyal customers and advocates is intelligent marketing. So, take a look at your current ‘loyalty programmes’ and answer this simple question: are they simply bribery or about building loyalty?
