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.