Loyalty, not such a long time ago, was a fairly easy thing to cultivate. You give a punch card or green stamps (or even wooden “round-tuits,” some of you may recall) to your customers, and they reward you with frequent visits or purchases so they can earn the points or badges to pocket free stuff.
Even today, as businesses like restaurants, retail stores, airlines, and hotels work to digitize and mobilize loyalty programs, customers still find it exciting and compelling to rack up the rewards.
But a funny thing happened on the way to the bank—loyalty, it seems, can be a fairly fickle concept—and even with the ease of participating in today’s e-programs, they don’t seem to be creating the brand affinity and “stickiness” that companies crave.
In fact, a third of customers will vote with their feet after a single instance of poor customer service, according to one survey. Keep ‘em happy, however – with outstanding personal service, great products, and minimal gimmickry—and you have an 80 percent chance of cementing that loyalty.
The message here: Being loyal to your customers, in today’s uber-competitive landscape, is as critical—if not more so—as customers being loyal to you.
If it seems like the script has been flipped, you’re right. In the days of Loyalty 1.0, those green stamps paved a one-way street of loyalty, from consumer to company. But now, in the world of Loyalty 1.5, with the ability to gain insights through apps, clicks, interactions, and views, it’s easier than ever to open a reverse lane of loyalty traffic from the company, right back to the customer.
So, let’s step back for a moment and think about what we really want to do. How do we tool our loyalty programs to demonstrate our love of, and affinity for, our consuming public? And, in particular, how do we replicate this online, without the benefit of the human interaction that comes with bricks-and-mortar businesses?
How to be loyal to your guests
Here’s an example using a counter service fast-casual restaurant concept.
Imagine if you will, striding into a local fast-casual restaurant near your office. You’ve been in about once per week for the last two months because it is close, and you like the food. You decide you’re in the mood for their grub again for lunch, so you cross the street, walk in the door, and take your place in line.
As you wait, you look at the menu and think about the meeting you just departed. Now, you approach your cashier, Susan (you know because of her name tag) and she looks up and says, “Hi, Mr. Smith! Great to see you. Would you like the usual today?” You are shocked she knows your name and are impressed she knows your usual order. You reply, “Yes, please,” and add a drink. Susan goes on to say, “Mr. Smith, you’ve been in a lot recently and we love serving you. Lunch is on us today!”
In this scenario, it’s easy to see why you would be floored. Susan not only knew your name, but she comped your meal too. The rest of the experience is equally as stellar (clean restrooms, a spotless restaurant, a follow-up visit from the manager) and you return to the office and tell six of your co-workers. The restaurant was loyal to you — which created an emotional bond, and the intensification of your love for that restaurant brand.
Loyalty 1.0 and 1.5 promised the ability to scale loyalty, and in most cases it did. But to add personalized messaging – like that offered by the restaurant chain — and to attempt to be loyal to your guests on this type of grand scale, takes time and a mastery of technology. Is your company up to the challenge?
If you’ve been around for awhile, perhaps you felt a little déjà vu when you heard loyalty platforms would save your team time?
Many years ago in a galaxy far, far away, a similar promise was made…
The Machine of The Year – 1982
At the dawn of personal computing, and before PCs and laptops became ubiquitous, we were promised that these gizmos were going to make our lives easier and give us more time to enjoy life.
The impact of the Apple II and the IBM PC was fully demonstrated when Time magazine named the home computer the “Person” of the Year for 1982. It was the first time in the history of the venerable publication that an inanimate object was bestowed with this award.
An excerpt from an accompanying article, “A New World of Dreams,” painted a rosy picture of a promised future:
“…Point is, it will save you time. Time time time. And we need all the time we can save. Can’t kill time without injuring eternity. Thoreau said that. Great American, Thoreau.
You say: Why should I want to save time? I hear you, friend. I hear you. You wonder where it gets you, saving all that time when you think about old Henry Ford’s gizmo that was supposed to save a peck of time. Only instead of conquering the open road, we wound up living on it. You’ve got a point. You a college boy? But this is the country of the A-bomb and the zipper. We always save time, good and bad. Tempus fugit. Time is money. Most of all, time is dreams. And computers give you time for dreams.”
Loyalty 2.0
So, how do we upgrade to Loyalty 2.0? How do we blend all that we have learned to produce a loyalty relationship with our clients that is as strong as the one we wish them to have with us? A good starting point is to replicate the 1-to-1 experience – with as much richness as we can – in the digital universe.
For a Loyalty 2.0 program to succeed, it needs to have a few of the following features:
- Social media integration
- Detailed analytics
- Targeted email marketing
- Targeted text message marketing
- Smartphone integration and an app
- Software that’s integrated with POS
- Segmentation tools
- Campaign tools
- Customer recognition
- Loyalty automation
The last four points are the most important. Most Loyalty 1.5 platforms lacked automated campaign and segmentation tools. Or, took too much time and effort from your teams to create the kind of personal connections we are advocating for now.
To get your company on track quickly, you might consider a provider like Punchh, LevelUp, Paytronix, and others that live in the Loyalty 2.0 space.
All of these are vendors that are purely focused on the B2C experience. They are dedicated to providing clients with a mobile-first strategy. It makes it easy to analyze customer behavior, generate insights, and develop sophisticated marketing automation. And it makes customized campaigns and promotions possible. Most offer deep integrations with leading eCommerce/online ordering, POS, and payment providers. All that provides marketers with a single view of the customer for omnichannel engagement across physical retail and digital channels.
Are you ready to take a leap forward into the world of two-way loyalty? By adopting a Loyalty 2.0 mindset, you will find it easier to be loyal to your customers. However, you’ll still need to commit corporate resources to execute with success if your customers are to feel the love.
Doug Reifschneider is a dynamic results-oriented, data-driven professional, Douglas drives nationwide growth through the creation and delivery of unique, creative brand strategies enhancing customer affinity and market position. With 25+ years of executive marketing experience, he strengthens brand equity with resonating positioning strategies. He uses successful marketing programs and innovative marketing campaigns that boost revenues. An innovative leader with strong team-building and collaboration skills, his strategic initiatives generate substantial shareholder and franchisee value and open new revenue opportunities.
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Jim Weber – Managing Partner, ITB Partners
Doug, great artcle.
Thanks Phil.