Time to Rethink Customer Loyalty
Most businesses understand the enormous value related to exceptionally loyal customers. That is why businesses of every size and form have implemented loyalty programs to maintain their best customers coming back again and again. Sadly, this traditional loyalty version has grown tired and supplies little differentiation on the market today. Consequently, it is time to rethink customer devotion.
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THE LOYALTY FLOOD
Unfortunately for many businesses, any advantage that was initially gained through loyal programs has rapidly eroded. While airline, hotel, and car rental agencies were the pioneers of mainstream loyalty plans, other companies were quick to leap on the loyalty program bandwagon. The result is a business environment where every restaurant, gas station and pet store has some form of loyalty card or application.
As a result, having a loyalty program is not a competitive differentiator. It is now a mainstay of a business environment where loyalty applications have become a product and a potential detractor to the overall customer experience. They get in the means of business efficiency - often necessitating an additional step in the consumer experience process. They've become nothing more than another way to offer a price promotion. Loyalty programs can also create disdain for clients that can not obtain the benefits or special pricing offered only to program associates.
WHEN LOYALTY PROGRAMS BITE BACK
Some loyalty programs miss the point completely and may actually drive customers away. Hilton Hotels, for example, has a long-standing loyalty program called Hilton Honors that accumulates points based on the number of overnight stays at their network of hotels. To get a career traveller, these loyalty points may continue to accumulate within a 10 or 20-year time period.
On the outside, Hilton's loyalty program appears simple and straightforward; The more a customer remains - the greater rewards they could receive. In certain circumstances, but the fine print can really bite back. If changes to a customer's travel habits keep them from a Hilton property for 12 consecutive months, the client will lost ALL accumulated points and privileges. This coverage, in consequence, erases 20 years of devotion as well as any associated rewards or benefits.
The client might have been loyal and may even have been an advocate for Hilton. Penalizing a loyal client for absence of activity for 12 months will definitely damage any good will that may have been gathered over the prior 10 to 20 year time period.
IT'S TIME TO RETHINK CUSTOMER LOYALTY
If companies wish to reap the advantages of accurate customer loyalty - it's time to rethink what client loyalty really means. Customer loyalty isn't obtained by simply holding a card, accumulating points, or redeeming rewards. Furthermore, loyalty can't be measured simply by customer longevity, frequency, or buy quantity. Customer loyalty isn't a one-way road; it cannot be determined solely based on what the customer has done for the company.
Instead, customer loyalty should be turned upside down. Perhaps more companies would get it right if they measured loyalty concerning the level to which the COMPANY is faithful to the client as opposed to vice versa. Companies should strive to recall repeat customers, address them as individuals, call them by their title, and then treat them special.
Think about the simple lesson of consumer loyalty that was demonstrated each week about the 1980's sitcom "Cheers", the pub where everyone knows your name: At the start of each series, the bar's best customer, 'Norm', would enter the bar and proceed to 'his' barstool. There wasn't any loyalty application, no card to scan, without a 'platinum' level needed to obtain entrance. Everyone indeed knew his name, he had his very own seat at the bar, and the bar owner knew exactly what he wanted to drink. 'Norm' was indeed faithful, but the establishment was extremely faithful to him as well.
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