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.