Author of "This Is Rage" and "Endless Encores"

You Call This a Loyalty Program?

By on Apr 13, 2017 in Blog | 0 comments

Try this episode on for size and tell me how it makes you feel about the brand:

I recently logged into one of my hotel loyalty accounts where I had amassed several hundred thousand points. That is, I thought I did. All my points were gone. Apparently this chain has a policy that deletes all your points if you don’t stay at one of their properties for a year. Did they send me a courtesy email reminding me I needed to stay there toward the end of the twelve-month lapse? They did not.

I called customer service and they recited the policy back to me, willing to say farewell to a customer who had paid the freight to accumulate several hundred thousand points in its loyalty program, just not in the past 14 months.

Then I tweeted my complaint about the forfeited points publicly. A few hours later whoever runs the company’s Twitter account tweeted back publicly that the company was very sorry for the situation and dedicated to my satisfaction. The Twit-master asked that I send a private tweet to follow up, which I did. Then we moved the correspondence to email.

I was then told that the company had a one-time exception to the policy where points could be reinstated, but that had already been done for me approximately 13 years ago. Silly how I could have forgotten their grace. However, they said that in an attempt to reinstate my customer satisfaction, they would restore half my forfeited points now and the other half if I agreed to stay at their properties at least three times in the next six months. I wrote back that it sounded a bit ridiculous to be playing Let’s Make a Deal – Loyalty Edition with them, but I would agree because, well, why not?

To their credit, they did return half my points upon receipt of our “written agreement” in that email thread, and I have booked one stay with them. I just wonder, is this what they really set to accomplish in developing their loyalty program? Is it a loyalty program at all, or just a rewards program that effectively gives me a rebate on what I spend provided I do it on their timetable?

If you give me a reward for my business, then take it away because I didn’t precisely follow your rules, then give it back conditionally with an expectation that somehow I have become pleased by our interaction, how has this helped me as a customer or you as a business? It’s a quid pro quo. I don’t think a quid pro quo has anything to do with loyalty.

When I think about loyalty, I think about preference. When I think about preference, I think about what brand comes first to mind when I need a particular item or service. I choose that brand for a host of reasons, for the totality of my experience with the brand.

I prefer to fly Alaska Airlines because they tend to treat me better as a human being, so I am loyal to them. I am also a member of their loyalty program, but that has very little to do with my loyalty. The way we interact all the time has to do with my loyalty. There is a consistency in my interaction with their airline personnel whether I am flying in coach or upgraded to first class, whether I bought a discount or full-fare ticket. That consistency is what creates loyalty.

I prefer to shop at REI for sporting gear because they are patient with me when I come to their stores not knowing nearly as much about hiking or biking shoes as they do, and when I leave it is with the right pair of shoes. I am also a member of their co-op because that is required to shop in the store, and I get a member rebate every year, but that is not why I am loyal. I am loyal because when I am on a trail or in spin class and my shoes are comfortable, I remember how great they were about helping me get the exact fit and charging me nothing more for their time.

I don’t prefer the hotel chain that gave me back half my points now with a contingent promise for half my points later. We have a transactional relationship based on price and location. I wouldn’t seek them out. I could, but they have given me no reason. Now when I think of them I think of my Let’s Make a Deal experience rather than any experience staying under their roof. That’s sad.

Maybe the problem is terminology. Maybe there is no such thing as a loyalty program. Maybe they are all just rewards programs masquerading as loyalty programs. That’s kind of a punt when you think about it. We could design a loyalty program that involved every point of customer interaction to ensure your satisfaction, but heck, that would be hard, why don’t you just take these points instead and we’ll play like we’re loyal to each other even when we know, wink-wink, we couldn’t care less about each other. It’s a bed and bathroom and points if you follow our rules, so come here at least every twelve months and someday maybe you can cash in those points for a standard room on the house. Maybe, if we have availability, certain restrictions apply.

I recently attended an e-commerce industry conference where at more than one session I heard the phrase, “There is no customer loyalty, consumers only care about price.” If this cynical statement is true, then I wonder why we have marketing departments at all. Don’t believe it. All customers are not automatons who solely focus on what’s cheapest.

Brands are not dead. A brand is a promise. Brands compete on price, quality, and service. If a company wants my loyalty it is there to be won, like Alaska Air and REI. If a company wants to make it about points and rules, that’s something else, and yes, in that scenario why should there be customer loyalty?

You get what you give. Since you’re selling and I’m buying you get to go first. You want my loyalty, show me yours. You want my loyalty, enter into a brand-customer relationship with me. You want to make it about points, if you piss me off I’ll dump you at the next possible off-ramp.

Loyalty is hard to win. It should be, because it’s valuable. That’s why the great brands think in terms of lifetime value rather than rules. If I have to publicly embarrass you with a tweet to get your attention, you don’t care about me a hoot, especially when you just had me on the phone. Think about that the next time a company penalizes you for breaking its loyalty rules. Those are stupid rules. You don’t need the points that badly, and if you don’t prefer the brand, you sure don’t need its crappy rewards program.

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Image: Stefan Hatos – Monty Hall Productions

Filed under: Brand, Business, Marketing Tagged: Alaska Airlines, brand is a promise, customer loyalty, customer service, Let’s Make a Deal, lifetime value, loyalty program, marketing apocalypse, REI, rewards program
Source: Corporate Intelligence

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