Loyalty Marketing is overrated

Image courtesy of Thomas Voorn

I belong to a few loyalty programs: SkyMiles, Starwood, Priority Club, Virgin Flying Club, Virgin Elevate. But almost every brand tries to sign me up for more programs: Supermarkets, Coffee shops, Gas Stations – you name it. My basic stance towards loyalty programs: You continue to make a great product/deliver a great service AND your competition doesn’t trump your efforts, I will keep coming back. Offering me loyalty points and bribes perks won’t keep me around. There are a few exceptions to that rule: airlines come to mind. I love Virgin America and Virgin Atlantic, can’t stand flying with Delta. But my Medallion Status (second group to board, a few upgrades once in a while) and the possibility to afford a business class ticket through my SkyMiles keeps me around. And the fact that Delta flies almost anywhere while my favorite carriers don’t fly to little towns such as Seattle or Atlanta. Brand often mistake loyalty for retention. Retention is just a behavior. I do fly Delta because nobody of my preferred airlines flies to that destination nonstop and I do accumulate points. Loyalty is an attitude: I wouldn’t recommend anyone flying Delta. The whole Medallion thing is rather ridiculous, the product and service stinks. 

Real loyalty is becoming more and more important for brands. But loyalty shouldn’t be confused with points, cards and status. Besides the obvious product/service benefits, people are looking for intangible benefits from their brands: Samsung with their airport chargers, Zappos with their commitment to service, Prius as a symbol for being on the green revolution party. 

Sure, keep on offering retention tools: Coupons, supermarket cards and special retention offers will people keep coming back to your store. Especially when times are tough and you offer the best deals. But, ultimately, you put your business at risk just focusing on retention tools. Times will get better and people will get antsy, looking for the new, new thing. Unless you converted them to loyalists through your extraordinary product/service, to people that want to spread the message for you, you will lose them. And no promise of points will make them return.

Stop talking. Start doing.

Did you hear the song that started to become a hit last year and turned into a monster hit in 2008? That song is played at every conference, Web 2.0 summit and social media meeting of the minds. Nobody knows the exact title but it goes like “Businesses have to stop talking and start doing”. I’m sure you’ve heard that song many, many times.

Most businesses interested in Social Media and Conversational Marketing remind me of people ordering fitness equipment through infomercials: They know they need to do something about their fitness and health. And they order stuff to start talking about really doing it. Yes, they open up the package, are so confused by the instructions that they stop doing anything. Just to continue watching infomercial, still talking about doing something.

People are opening up to the public more and more each and every day. They describe in detail their desires, needs, fears,  anxieties, hopes, etc., etc. Opportunity is growing each and every day for businesses to help these people, build more useful products that tap into these feelings. Have you bothered listening? People tell businesses what they want. Sometimes very clearly. Sometimes not that overt. But they are always telling you what they are feeling.

Business that listen will survive and prosper in this new marketing reality. They won’t see themselves as the hero anymore. Instead, they see people as the heroes and will do everything to expand their superpowers by giving them what they want.

It’ s not enough to think about doing anymore. It’s time to listen and start doing.

Recognition

Local businesses know everything about recognition: Acknowledge and recognize good customers, make them feel welcome and listen to their needs and desires. These good customers will spread the word for you and add new customers. One by one. That’s how you build a flourishing coffee shop, a profitable flower store. This is a customer-centric approach that plays well within the overall idea of the Cluetrain Manifesto.

National/global brands understand the need for recognition as well. Instead being customer-centric, big brands focus on themselves by creating ginormous CRM systems, hoping to cash in through recognition. That’s not recognition. That’s just opportunistic.

Merriam-Webster defines recognition as ’special notice or attention’.  Paying attention to customers when it’s opportune for your business goals might lead to short-term gains. But offers no value for people in the long run.

Prying open the old marketing book, customer satisfaction is a combination of customer perception and customer expectation. If the client perception of the product delivered is lower than their expectations, negative satisfaction is the result. However, if the client’s perception of the product delivered exceeds their expectations, a positive level of satisfaction is achieved.

The challenge for national/global brand is in redefining ‘client perception of the product’. This is much more than a review on Amazon or Tripadvisor. Every call to 1-800-YOUR-CALL-IS-IMPORTANT-TO-US, each email, each interaction with the final product changes the product perception. I used to love my car, and the brand associated with it, until I had to deal with a service issue and were introduced to layers of bureaucracy. Now I can’t wait to get out of the lease.

In the new marketing reality, recognition is more than just paying special notice and attention to people. It’s listening to and understanding the changing needs and desires of people. Acknowledging them and integrating those insights into your marketing touch points.  It’s nothing new or revolutionary. It’s very human and natural.

So, next time when you want to find out more about the importance of recognition, close that marketing text book. Walk down to the butcher next door. You won’t regret it.

Brand Loyalty

I’ve been thinking a lot about brands lately and how they need to change in the new marketing reality in order to survive. Many things have changed: what defines a brand, who defines a brand, the roles communities play in defining and establishing a brand. Brands are still very important, maybe more important than ever, but brands needs to shift their focus from attention to loyalty.

The old marketing world told us that getting the attention of people, engaging them in your brand world, will ultimately lead to consideration and purchase. Since it’s becoming increasingly harder to break through the clutter, most agencies focused their efforts on getting attention at any cost: Takeovers, Pre-Rolls, Interstitials, etc. And, as we all know, they are losing the battle: abysmal CTR’s and undesirable ROI’s coupled with apathy towards advertising. Focusing on mass attention barely works and will not work in the long run.

The future of marketing is getting attention through brand loyalty. I’m not talking about CRM or other top-down connection programs imposed by brands. In some cases they might achieve the business goal of repurchasing, more often than not based on lack of alternatives or convenience.

Traditional brand loyalty exists when people have a high attitude the brand. In the new marketing reality, this high attitude has to be developed through building relationships with people. Not marketing to people, rather practically and emotionally connect businesses with people. In many ways, a practical, efficient connection with a business often leads to an emotional connection. (My Infiniti Service Manager has done more to build my relationship with the luxury brand than any glossy brochure, commercial or banner ad.) These connections are not restrained by information transmitters or reach mechanisms. Frankly, the only limit imposed on these connections is based on organizational issues within businesses.

Seth Godin says it best in his new book ‘Meatball Sundae’:

“Feel free to get all excited about the neat things you can do with the New Marketing. But be prepared to fail. If you don’t get your marketing in sync with your organization and your product, game over.”

People are starting to define brand loyalty by the degree businesses enrich their lives. This encompasses all brand touchpoints: Service, Retail, Emails, Customer Support, etc. People expect a string of connectivness from all touchpoints. It can be practical, efficient or, at best, emotional. These connections turn into relationships and, ultimately, brand loyalty.

Brands will matter more than ever. And a brand can’t be developed in a vacuum or through brand exercises. Good brands always were organic expressions of organizational structures, vision and passion. Future great brands will be developed and nurtured through relationships.Because everybody has a seat on the brand table today. Make them feel at home.