Your Loyalty Slip is Showing
There are a million and one "rewards" programs that are growing increasingly indistinguishable. What many companies don't understand is that it's the customer experience that matters most, not the prize in the Crackerjack box.
By Howard Tullman Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology @tullman
Today the best businesses-- in retail, in hospitality, and even in health care-- aren't simply selling products or services. They're selling the whole package: the experiential journey; the feel-good buzz; and the "be-back" soon. It's increasingly critical to swiftly move the consumer along this path from connection to engagement and attachment and from there to a continuing commitment. Loyalty and "locked-in for life" are the dream and the desired state. But these days, achieving that dream is way more complex and multidimensional than an occasional upgrade or freebie.
More and more affluent consumers no longer have a "favorite" or preferred product or service within an increasing number of verticals. And Alexa is the next nail in the coffin of the big brands because consumers just want their cornflakes or batteries, or their meal kit and it don't much matter anymore who makes the stuff as long as it's delivered to their home the same day.
It seems to me that millions of merchants, marketers and managers just don't get it. Loyalty only lasts as long as you deliver--each and every time-- and no one owns anything more than the moment you've got to earn my business. Loyalty programs are everywhere these days, but for that very reason, they're losing their impact and their perceived value-- unless they're backed up and enhanced by the way your people and your procedures operate. Your programs need to incent and reward regular and continuous engagement and repeated transactional activity.
This is especially essential because the days of churning one-off customers are over - it's too costly, it's too hard, and the resultant and constant need to replace the clientele can kill any company. In a world where you've got to focus on keeping the customer coming back-- a world in which the customer cares less and less about owning anything and more and more about utility, convenience, speed and ready access-- you and your team have to manage every part of the path and every step in the journey to be successful.
It's a journey that begins before the customer even gets there, with often inflated expectations and sometimes unrealistic anticipation, and then moves to the delivery of the "thing" itself. Finally, provided that you don't manhandle the mood or snuff the satisfaction, the customer has fond memories that last long afterwards and, most importantly and far more precious than gold, produce favorable WOM (word of mouth) and authentic, heartfelt recommendations. Your best promoters and influencers aren't the paid shills and cynical celebs; they're the passionate people who lived their dream and can't wait to share their stories with others.
But even your favorite fans will tell you that they're not prepared to pay up for your products simply because they buy into your story (or brand promise) unless your offerings meet all of the other components of their constantly morphing consideration set. We're talking about assembling and purveying a bundle of bargains, behaviors, and benefits that are consistently better than the other alternatives.
The truth is that, if you disappoint me when I walk through the door or beat me up when I'm about to leave, you can be sure that I won't be back. But as obvious as this may seem, every day we see actions, processes and systemic shortcomings that are designed that squander customer satisfaction. You can give me all the points that are possible, but if your people or your procedures piss me off, that's the impression I'm coming in or going out with and you're not likely to turn me around with special discounts, package deals, special show access, or anything else after the fact. Because in customer service, you don't get a second chance to make a first impression. If your staff and services don't sync up with the really swell promises you've made, see ya.
How hard can it really be to do these basic things right? My shoe salesman knows my shoe size and preferences by the second time I'm in the store because he keeps track on his own little 3x5 customer cards. And I feel that he cares about me and also about not wasting my time. I'd call that really small data, but it matters, and it works. Businesses can't afford any longer to assume that one size fits all - we know that it doesn't, and the data are there to enable differentiation and mass customization.
But I can still go into some of the most expensive hotels in any city (where I've stayed a dozen times before) and be treated like a stranger every time. Wouldn't it be nice if they "knew" me, even just a little bit? Many of these places don't even know that I'm a part of their loyalty programs because the back-of-house systems aren't connected to and available at the front desk. And that's just the beginning of the BS that the business traveler suffers.
How about the "our check-ins aren't until 3 pm" story? And, of course, if you make a fuss or scream loudly enough - wonder of wonders - they suddenly find a room for you. But why should you have to shout and get upset. And why should it be so hard to figure out that a certain number of rooms need to be turned over and cleaned up and ready to go by 10 or 11 a.m. - maybe not for the tourists, but for the road warriors. They do it in Europe on a 24-hour cycle - why can't we figure it out? What's at work here is pretty simple - the entire process is designed to suit the schedules and the needs of the housekeepers and maids, and not the customers. It's all inside out and tough on you rather than customer-centric and responsive to a recurring, regular and simple- to-solve issue.
On the other hand, when you use the increasingly available data to combine and drive the in-store and the online connections with your customers and you build powerful loyalty programs that offer both monetary and experiential perks and other advantages, the impact on the bottom line couldn't be clearer. My favorite story for some time now has been Ulta Beauty (www.ulta.com) whose whole business is hyper-personalized and where more than 22 million members of the rewards programs account for over 90% of sales. They use their information and back-office tools to augment and improve the in-store engagement and create the very clear message that you, your presence and your time are all valued and much appreciated.
The seamless combination of "hurry" (time sensitive) and "heartfelt" (sincere and authentic) is a wonder to watch. It's a one-on-one feeling delivered on a massive scale and no one does it better today.