Time to Rethink Customer Loyalty
Most companies understand the enormous value related to exceptionally loyal customers. That's why businesses of every size and form have implemented loyalty programs to maintain their best customers coming back again and again. Unfortunately, this conventional loyalty model has grown tired and supplies little differentiation on the market these days. Consequently, it's 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 leaders of mainstream loyalty plans, other businesses were quick to jump on the loyalty program bandwagon. The result is a business environment where each restaurant, gas station and also pet store has some form of devotion card or program.
As a result, acquiring a loyalty program is not a competitive differentiator. It is now a mainstay of a business environment where loyalty programs have become a product and a potential detractor to the overall customer experience. They get in the way of business efficiency - often requiring an additional step from the customer experience procedure. They have become nothing more than another way to offer a price promotion. Loyalty programs may also produce disdain for customers that can not receive the benefits or special pricing provided only to program members.
WHEN LOYALTY PROGRAMS BITE BACK
Some loyalty programs miss the point completely and can actually drive customers away. Hilton Hotels, as an example, has a long-standing loyalty program called Hilton Honors that accumulates points based on the amount of overnight stays in their network of resorts. For a livelihood traveler, these loyalty points may continue to accumulate over a 10 or even 20-year time span.
On the surface, Hilton's loyalty program appears straightforward and simple; The longer a client remains - the more rewards they could receive. In certain circumstances, but the fine print can actually bite back. If modifications to a client's travel habits keep them from a Hilton property for 12 successive months, the client will lost ALL accumulated points and privileges. This coverage, in consequence, erases 20 years of devotion as well as some other associated benefits or rewards.
The client may have been faithful and might even have been an advocate for Hilton. Penalizing a loyal customer for lack of action for 12 weeks will definitely harm any fantastic will that could have been accumulated over the previous 10 to 20 year time span.
IT'S TIME TO RETHINK CUSTOMER LOYALTY
If businesses wish to reap the advantages of true customer loyalty - it's time to rethink what client loyalty actually means. Customer loyalty is not obtained by simply holding a card, accumulating points, or redeeming rewards. What's more, loyalty can't be quantified simply by customer longevity, frequency, or buy volume. Customer loyalty is not a one-way street; it can't be determined solely based on what the customer has done for the company.
Rather, customer loyalty should be turned upside down. Maybe 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 aim to recall repeat clients, address them as individuals, call them by their name, and then treat them unique.
Think about the simple lesson of consumer loyalty that was demonstrated per week about the 1980's sitcom "Cheers", the bar where everyone knows your name: At the start of each series, the pub's best customer, 'Norm', could enter the pub and proceed to 'his' barstool. There wasn't any loyalty program, no card to scan, without a 'platinum' level needed to gain entry. Everyone really knew his name, he had his very own chair at the pub and the bar owner knew exactly what he needed to drink. 'Norm' was indeed loyal, but the establishment was extremely faithful to him too.
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