Customers in Captivity – Debunking the Loyalty Program Fluke

(Part 1 of a 2-Part Series)

Let’s hold a mirror to ourselves people!  The gig is up.  Customers have our number and they’ve had it.  It is just plain too much work to reap the benefits of a ‘loyalty program.’

So, check it out. Here are the classic experiences customers have with loyalty programs. It’s time to take action.

1. The Complexity Rigmarole

You may find it great that there are fifteen-hundred partners you’ve gotten free stuff out of that you can pass on to customers when they meet the massive requirements for their redemption… but who cares?

Customers receive the glossy packages and they figure you spent a fortune on printing. They start reading and almost immediately hit information overload.  Their eyes roll into the back of their head before it’s all deciphered. Your program materials are tossed aside to read another day and that day never comes.

Take Action: Think ‘Pearl’ Theory

Pick out one great pearl of an offer.

Something really special you can do for a customer you treasure and let them know what it is.  Then deliver it.  Customers will remember that ‘pearl’ and act on it because it’s simple and memorable.

2. Seen One…Seen Them All

Loyalty programs are so much alike. The plethora of stuff being dumped on customers has the smell of promotion and the impact of ho-hum. A bunch of money-off coupons doesn’t cut it anymore. Everyone’s been there and done that. It’s not different enough to say, “Choose me,” “Love me.”

Take Action: Find Something Special

Brainstorm something special and unique that speaks your corporate personality (something no one else would do but you).

One spa company I worked with established a personalized relaxation plan and custom blended aromatherapy for their clients.  Truth be told, they could establish five to seven blends that fit the majority of their clients by cluster, but the messages and follow-up were personalized.  The allure of the personal touch pulled customers back into the spa where their treatments were customized and continued the experience with the aromatherapy scent.

3. You Don’t Know Me?

I had to remind a company where I’ve spent more money than I can even tally that it was my birthday.  Not because I’m an egomaniac or need to be stroked on my birthday, but because they made a big deal about asking the date of my birthday and told me it was special to them.

My birthday day came and went.  I didn’t hear a peep from them.  It was disappointing.  When I reminded them (and you bet I did), they sent me a coupon code for free shipping.  But the bloom was off the rose.  The notion that I believed – that I was special to them – withered considerably.

Take Action: Know Your Customer

More importantly than the special days, know who your best customers are on the regular days.  Make sure that you’re building in the corporate memory to welcome them back, acknowledge their preferences, and ask how things are going.

You need to be constantly trolling your database to see what’s happening with important customers, and then step up to help when necessary.

Remember the countless stories about the Ritz Carlton? At check in, they remember if a guest prefers a feather pillow.  Although the information is in the database, flagged on the customer file so the desk clerk remembers to bring it up, the gesture says, “We know you.” (You’re not a number to us.  You’re a person worth remembering and we care enough to remember it.)  Pow! Now, that’s loyalty creation.


Customer Loyalty Programs - Customers in Captivity

5 comments to " Customers in Captivity – Debunking the Loyalty Program Fluke "

  • […] After reading this, how much of this stuff would make you feel loyal? Scratch that.  After reading this, how much of this makes you downright exhausted and inclined not to buy from a company that makes you jump through these hoops? If you missed Part 1: Customers in Captivity – Debunking the Loyalty Program Fluke […]

  • Jeanne,

    You are correct on all points. I would like to add that some of these loyalty programs have increased customer effort to the point of truly driving customers away, rather than making them more loyal.

    Airline mileage programs are a good example of this.

    Lately, several national grocery chains have created supposedly personalized loyalty coupons/discounts for their customers, but require more customer effort and time, to the point of driving customers away. Safeway’s Just For U (Customers are now referring to it as “Just F U” and Fry’s (Kroger) VIP programs require customers to review the offers and then load them to their loyalty card via web or mobile app. Wouldn’t it make better sense to automatically load the deals and then present them to customers to add to their shopping list? The small difference between “Hey, we have offers for you, but you have to go out and load them, otherwise you’re going to get the same old price as everyone else” and “Thanks for being our loyal customer, here’s what we have for you. Hopefully you will find them useful and load them to your shopping list” is about 10 minutes of customer time per week and a huge feeling of being taken advantage of.

    There are many more examples, but the two above have been recent and discouraging enough for my family, that we quit shopping at both chains. One who our son has worked for over the past six years! They have tin ears, as we and many others have complained to them about the increase in effort since they began touting the program last year.

    • jeanne

      Thanks for sounding in on this. Your experience is so spot on. These companies should they themselves have to try to redeem the points or try to get the rebates, or any of the other rigamarole (my grandmothers word – just love it!) that they put their “loyal” customers through.

      You are so right that these programs are so much more frequently about the perception of doing good for the consumer. Wondering and hoping not – that the goal is to get the exposure but not much participation.

      What is sad is the reality of your experience and scores like you — of driving folks away.

      How should we address this Kevin! I’d love to somehow get the word out on this!!

  • I find the level of dissatisfaction in many aspect of business really surprising not just disloyalty schemes, given that the only way to have a successful business is to maintain profitable customers WHY would any owner or CEO allow anything that drives customers away anywhere near the shop? the whole point of loyalty schemes is so a business can know intimately a particular customer and market appropriately to them, yet most companies act (and market) as if this new customer list is ‘just another list’ to market to, rather than possibly the most valuable list the company has given the amount of data it can sometimes contain!

    It’s staggering how many businesses don’t have any grasp of what the customer see’s or experiences when they deal with said business.

    Killing customers with a bad loyalty scheme is insane, rewarding customers with a thank you scheme that is intimately matched (appropriately, not scary intimate) to that persons likes, wants, previous purchase directions etc is the best way to grow that customers lifetime value.

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