Divided Loyalties
Loyalty scheme. Sounds like an oxymoron, but it’s the truth: a scheme to gain loyalty.
Faith in loyalty schemes (also called loyalty programs) was beaten out of me over three punishing rounds.
1. Fly Buys
I spent often. Sometimes without need. But it wasn’t enough.
As I eyed a modest appliance ‘reward’, my points hit a critical time shift and began decaying faster than Darmstadtium.
All I got for my loyal years was a book of ten movie tickets. Not valid on Saturday nights. Or for movies marked No Free List. After 12 months, even these expired.
2. Frequent Flier Points
I flew every few months and actually reached the first threshold of reward heaven.
As I planned a wild junket to Mangalore, the value of my points crashed due to a policy change. Nursing hope, I modestly reset my compass to Bacchus Marsh.
It came to nought.
3. Pet Food
Drawn by the promise that my tenth purchase would trigger a kindred freebie, I journeyed to the market for years to buy titanic sacks of dog food.
When the day of reckoning finally dawned, a 2 kg cat food purchase was found on my loyalty card.
So that’s all I got.
Cashiers look faintly surprised when I admit to being loyalty card free. Call me old fashioned, but I think loyalty should be rewarded.
Not just the loyalty of directors (who fly free to Mars, though they can pay) but the loyalty of all customers. People who choose brands based on their promise.
As with impersonal banking, it’s the breach of trust that hurts the most.
How about you? Are you cutting a rug in Loyalty Land? Or has it been pulled?
Your tale will earn my undying…
thanks.
Paul Hassing, Founder & Senior Writer, The Feisty Empire
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Ahhhh, loyalty towards customers. That old chestnut, eh?
You’ve provided a soapbox here Paul, that I shall not refuse.
My pet hate, doesn’t relate to loyalty schemes (I gave up years ago), but to the lack of loyalty and rewards given to loyal customers.
I’m looking at you, the Telecommunication Industry!
Why can’t I as a longtime customer, who pays promptly and is saavy enough to rarely need any form of technical support, have access to the prices and plans offered to those who are not even customers?
It gets worse: these special prices and plans are offered to people who, by their very definition, are not loyal and will run into the arms of the next company offering a cheaper product?
How does the fact that I am in a contract supposed to make me feel better about this predicament?
I know this isn’t anything new – in fact I’ve been railing against telcos and ISP’s on this subject for the better part of a decade now, and I know it goes back much longer than that.
I would love to see a company in this industry do the following:
* Have no contracts
* They offer the best pricing possible on a month by month basis
* They accurately & transparently track their pricing and their competitors to show what is more cost-effective for the customers (over a period of time)
I’d expect them to still be profitable – I’d probably buy shares in this hypothetical company. They would have to offer good service (it would be hard to do any worse than many of the incumbents in the industry anyway).
I would expect that by being up-front, honest, LOYAL in return, this company would have a profitable and stable business model supported by rabidly loyal fans – that would be the paying customers by the way
Ok, I’m my soapbox, and need to get on with my day, so thats enough daydreaming for now.
(But tell me you wouldn’t love to be a customer of THAT company!)
Fabulous riposte, Stephen! You’ve added two banana boxes and an old wardrobe to my soapbox. I think I see a line of people, snaking towards us with odds and ends to add to our pyre.
Come on up, everyone; the view’s fine (and we’ll enjoy a significant height advantage). Thanks a lot, Stephen. You just made a really good… point!
Stephen! Stephen! Stephen! Will you marry me? :- )
Bluddy awesome riposte indeed. I wish I could get such quality of content out with such clarity and so guilelessly (insert envy and large wads of appreciation here : ).
With such a company as you have described Good Sir, I would gladly leap into even the contractual abyss.
And Paul, as usual your quality curve continues it’s exponential arching to yet greater heights…which brings me to probably the only morsel that I would consider ‘addable’ to this banquet of bountiful beatification:
This very blog is unequivocal testament to, and demonstration of, that elusive jewel…Loyalty. A jewel that ‘industrialised humanity’ vainly continues to be only too desperate and willing to dig-up and destroy their, and our, own homes and sensibilities to manufacture/control…
I believe that loyalty, like every other ‘quality’ of life is both grown & received by GIVING IT!
Demonstration: Paul’s unwavering loyalty to his craft & people, results in art of the highest order. To be actually included in the conception, gestation, flowering & fruition thereof engenders loyalty by it’s very nature.
I’ve said it before…as has Mary Shelley ( http://bit.ly/uKr8w ) for the last 190 odd years…qualities of life cannot be manufactured, by the manufactured!
Or as Yoda says, do not try, Do!…there is no try!
Spiffing Chaps!..I’m honoured as always.
Cheers
Stephen G
Thanks Stephen, for the kind words in my direction. I have to express my appreciation for your inclusion of the Yoda quote. It is surely one of the most quotable phrases ever!
Interestingly, I have literally (yes, literally!) just had a conversation with a colleague about tactics to destroy loyalty. Please don’t judge me harshly – I haven’t turned to the dark side. I’ll expand on this later – but it has raised in my mind the question: When is loyalty harmful?
Dear Stephen G. That was the alpha and the omega of praise. You just made my week. Thank you.
Constantly asked if I belong to this loyalty program or that loyalty program – the looks I get are priceless.
People believe that loyalty programs are the ants pants – they are in fact a burden that require you shop at the ABC store because they offer a ‘reward’ not the best price
I don’t belong to a loyalty program and it is unlikely I will in the future
Dear Stephen H. Your question made me feel like Carrie Bradshaw from Sex and The City. I think I need to discuss it over lunch with my Jack Russell terrier friends…
Good for you, NLH! It’s nice to know I’m not alone. Thank you for your thoughts.
Hey NLH :- )
Good to see you (you wouldn’t be related to ‘Doesn’t pay to mess with me’ of ‘Deal Breakers’ ( http://mybrc.myobnet.com/2009/09/10/deal-breakers/#comments ), fame, would you? :- )
Person! Am I with you on that one! You know what I hate? Those bluddy cards & stamp things that I’m supposed to proudly keep & pull out of my wallet in front of other paying customers in the vain hope that one day, when I’m all big, and broke, that I’ll be able to redeem my 10% Discount on my 400th purchase! HOW EMBARRASSING, & BELITTLING & DEGRADING!
It reminds of the bluddy endless ‘Current Affair-esque’ Financial Advice Shows that explain that if you just spend 4000 extra hours a year and go without all the basic pleasures of life, you can save $1000.00 dollars a decade from those ‘caring’ companies that are charging us the lowest possible prices for necessary services! WHAT A TOTAL & UTTER INSULT!…and WANK!
And Dear Stephen H,
You’re very welcome and deserving of both high praise and the occasional Yoda visitation :- )
Hmmm! When is loyalty harmful? Good question. ‘Fatal Attraction’ comes to mind… :- )
And Dear Paul,
You are also and as usual, very welcome.
Who the hell is Carrie Bradshaw?
I know good ol’ Jack though :- )
Cheers
Stephen G
Hi Paul
It’s all a question of balance – the reward offered by the business needs to be in line with the effort/dollars expended to achieve the reward. A business offers loyalty points to encourage repeat business. Clearly in your case, the business was succesful in the first instance, however when you came to claim your loyalty reward you felt it was inadequate relative to your spend so presumably you won’t be purchasing any more dog food from the market. If however you had received a more appropriate reward then you would probably continue to patronise that market stall.
It is a good lesson for small business owners – a loyalty scheme can be an excellent way of generating repeat business, but the consumer does want value for money – get the two in balance and yo could have a life long loyal customer
oh Stephen G – I will have to find a new hat to wear LOL
Too easy it seems
Rewards rarely equate to value and often not to loyalty either – although some independant supermarkets have a good system going – not a loyalty program but a rewards program – present your fuel docket (any docket) and with a minimum purchase of $30.00 – you get $0.04 cents off per litre from the grocery bill – example a $30.00 purchase using a 60 litre docket would equate to $2.40 or 8% saving effective immediately.
That is a good, non-card, non longterm reward that is offered by smaller supermarkets
Thank you, Margaret. Your comments themselves add balance to our debate.
Good point, NLH. Though I’ve heard it whispered that the cost of the fuel discount is built back into all grocery prices – making us all unwitting supporters.
And what of the cost of administering the scheme? I don’t see Aldi supermarkets pulling any stunts like this.
Yet even this scheme is tainted. If you don’t use your docket within 30 days, it expires. As if loyalty, once expressed tarnishes like an old brass fire bucket. That really gets two of my goats!
Sometimes I’m a sucker for loyalty programs, and sometimes not – I usually differentiate between whether I’d shop somewhere without the loyalty card or not. For example, if I can earn points on purchases I would normally make anyway, I’ll sign up – but if I have to go out of my way to accrue points, I won’t.
I actually felt more rewarded by a business that gave me 10% off my next appointment because I referred a friend. It felt like a more genuine ‘thanks’ – because instead of waiting for me to take the initiative to visit 10 times, they immediately granted the voucher for my next use.
Thanks for weighing in, Megan. Referrals are another fine kettle of fish to which we ought to devote a post.
Paul – I would agree that the bigger supermarkets do that – but the smallr can;t – simply because they would lose customers to the bigger supermarkets IF the prices weren;t comparible – we all know we pay more at smaller supermarkets – but there is a difference between paying more and paying through the nose for groceries and convenience and knowing that the person behind the counter goes to the local high school
I don;t mind paying a little more for the convenience of shopping at the smaller more intimate supermarket – and having the ‘fuel literage’ discount is just another bonus if I can find that blasted docket!
Thanks for your clarification, NLH. I think my BIG SMOKE mentality may have clouded my perception.
How I wish I could move to a small country town and have an intimate supermarket experience. I’d never leave the deli!
No bluddy supermarkets out here Cobba! :- ) Got a servo and a dog! Pretty intimate…best to wear gloves though
Great comments ey?
I’m soooo on the same page as NLH…Nice one mate :- )
Cheers
Stephen G
I’m happy to report a ray of light amid the gloom.
Fonnie just got back from a Pump Class at a new gym. After the $13.50 session, they gave her a voucher for another session (or any other gym service) to encourage her to return.
They’re rewarding her loyalty BEFORE she’s even displayed it! I’m most impressed.
I am a big fan of the Qantas FF program with either Visa or AMEX because we do a lot of transactions and so we rack up points pretty quick and easy. Altitude points are also very good and relatively easy to accumulate and it has plenty of things to choose from to spend it on, which is great.
Fly Buys seems to have rewards that’s way out of reach. Compared to Altitude Rewards program, it’s chalk and cheese. With the QFF, you really have to be savvy to get the points working for you. Book early and plan well.
However things like 10 visits and get 1 free can be a little meaningless for customers if they are not FREQUENT users (ie. visit everyday) because they can forget to bring their card to get it stamped, etc. I have one of these cards for my hair cut, but never remember to bring, so it’s not working its “loyalty” magic.
Referral program sounds good but how would you track referrals? Especially if you use a MYOB system?! I’d love to know.
Thank you, Anthony, for injecting a whole lot of info into our discussion. This is great stuff!
I don’t use MYOB myself, so I’ll throw your question to our Hi T Princess, Megan. How about it, Highness?!
Leave it with me!
here is an interesting article – no just about customer service but a very large and well-known rewards system ad what to be aware of with ALL ‘loyalty’ schemes
http://www.news.com.au/business/money/story/0,28323,26090627-5013952,00.html
Thought everyone might be interested
… a bank does not have to advise a customer as to whether a particular product or service is, in all circumstances, in the customer’s interests…
Chilling stuff. But what a fascinating addition. Thanks very much for the link, NLH!
I think I can contribute here – having been ino retail and having run a loyalty marketing company ….
1. First thing that came to mind at the top was the $55,000 toaster syndrome – unless shoppers get rewards that are attainable and that they value,what is the point ?
2. These programs are fundamentally about an exchange of value: retailer gets the data – shopper gets the reward. Unfortunately many retailers do not get the data or use it – for a variety of reasons. And surprise, surprise, many shoppers do not get the rewards !
3. These programs, if well run, do work. But retailers need to realise the shopper is rightly in ‘W.I.F.M.’ mode – what’s in it for me ?
Cheers, thx for a great effort
Stephen Saunders
The Shoppologist
@shoppologist
Fabulous to have you in here, Stephen. I’m so pleased you dropped by. Thanks for your comments; they’re much appreciated.
Folks, if you seek a fascinating fellow to follow, Stephen is one!
Hi Folks :- )
We interrupt this topic for a noSh-it! News Update! (Insert ‘Newsy’ epiletpic seizure, & anxiety inducing music – ‘dt, dt…dt…dt, d, d, d, dt’ – here :- )
Only 731 Insurmountable Obstacles, 305 Re-Stategisations and 537 Red Faces later, and noSh-it! Wood-Fired Pizza is FINALLY, GO 4 LAUNCH!
Cop THAT Universe!!! Talk about Unstoppable Forces meeting Immovable Objects!… ;- P
And this time, it’s signed in Blood…but sealed with a Kiss…better make that a ‘Big Bloky Hand-Shake’…Dave might slap me! ;- P
So! Do you want to know when & where ‘n stuff?
Oooh! So glad you asked…
:
When: 11.00am-2.30pm, Tuesday, 22 September, 2009;
Where: Actually….uuuummmm!….I Can’t tell you!…WHY? You say?… ’cause Ive already pre-sold my entire stock!…WHAT? You say?…Well I’ve had so much support just from the local businesses I’ve been dealing with, that with them and all their staff wanting to come for lunch, I won’t have enough for anyone else…noSh-it!…I’m as gobsmacked as you are, believe me!…but I reckon if you’re gunna have a start-up dilemma, that this has gotta be the best kind?
OK! If you insist!…I reckon you’ve had fair warning…Of course You are Very Welcome to turn-up; I just didn’t want to unnecessarily disappoint you if you turned-up expecting your inaugural noSh-it Wood-Fired Pizza…so you may have to wait until Wednesday ;- P
So, are you tearing your hair out waiting for to get on with it yet? ;- ) Ahh! The joys of Virtual Communication…Oh crap! I forgot! You can find me via my Website!
Ok! Here it is:
I’ll be at Dave’s place – that’s National Capital Cartons – 47 Tennant St. Fyshwick, ACT, ‘Osstraaalya’ :- ) URL: http://www.nationalcapitalcartons.com.au/
Dave is a top bloke, and I’m honoured to promote & support his business; as I am grateful for his fine support, providing me with my Great Packaging Solutions and Great Launch Site :- )
National Capital Cartons ( http://www.nationalcapitalcartons.com.au/ ), was able to solve my unique packaging challenges (all of them), in one fell-swoop (i.e. in about 5 minutes). Previously I had contacted approximately 40 major ‘Packaging Manufacturers & Suppliers’ who couldn’t.
So, there you have it folks!…noSh-it! Wood-Fired Pizza is GO 4 LAUNCH!
That’ll do for now I reckon…
Cheers
Stephen G
Oh! Before I go…it would be horribly remiss of me if I left without thanking Stephen Saunders for his, as usual, fine input.
He’s a top bloke, a great Twit (he knows that’s a compliment), and you MUST FOLLOW him on Twitter @shoppologist.
And when he says ‘Shoppologist’, let me tell you, it’s absolutely noSh-it!
Just check out his blog ( http://shoppologist.blogspot.com/ ). In my humble opinion, it is unique and so rapidly informative..he uses pictures of businesses with brief comments/summaries (but only when necessary), that give very essential analyses, illustrating ‘do’s & don’ts’ for businesses from every psychological & marketing perspective. Bluddy awesome stuff! Highly recommended.
And no, he’s not paying me to gush all over the ’shop’ like this…he’s just been a straight-up help and he’s just so…ummm…well, for want of a better term…noSh-it! ;- P
Cheers
Stephen G
OOh! I forgot to mention – If you want to download a copy of my Launch Flyer (includes Menu & Pricing), it’s here – http://bit.ly/44Ygg1
Cheers
Stephen G
Faborama, Stephen! Hear hear to your comments re the Ologist.
You’re SO close now to launch! Can’t wait to hear the dough-by-dough account of your Fyshwick networking session.
Your flyer is very striking. I’m curious to know how it prints out. Have you got laminated ones to give out on the day, or a ruddy big board on site? Best regards and well done!
Hi Paul,
Thanks Cobba :- )
The Flyer prints out great. Couple of minor losses in the translation from my RGB colours to the Printer’s CMYK, but it’s not a problem. Danny Theuma and the folks from AddColour ( http://www.addcolour.com.au/ ), in, guess where?…Yep! Good ol’ Fyshwick, ACT, have been absolutely awesome!
Got my Menus laminated…but the Blackboard ‘thang’ is on hold for the moment until I can afford it…not a big expense, but at this point, not fundamentally necessary to my cause
.
No doubt the ‘dough by dough’ will ensue :- P
Cheers
Stephen G
Oh! Just thought I’d mention Cobba:
Some folks my be experiencing a bit of a ‘contextual anomaly’ in the Comments Re: ‘awaiting moderation’.
My last couple of comments have been small & therefore fly under the ‘weekend auto-moderation robot’ radar, whilst my bigger & earlier one (with the Launch News), remains ‘awaiting moderation’.
Cheers
Stephen G
Roger that, Stephen. Will see if I can dive under the hood and sort it out…
Ta daa!
Nice one Cobba! A man of many talents :- )
Have a great weekend mate (& folks). I’m gunna be flat-out for the next couple ‘o days prepping. I’ll pop in with my next update as soon as I can :- P
Thanks again for you support & encouragement.
Cheers
Stephen G
Great report, Stephen. Readers who backtrack to see it will be well rewarded. How exciting to watch your dream unfold on these pages! I really appreciate the fascinating thread you’ve woven into our posts.
Latest from The Age newspaper:
‘A survey by Perkler (perkler.com), a website that helps consumers organise and track their loyalty programs, found that while 82 per cent of Australians are members of loyalty programs, only 31 per cent regularly redeem rewards.’
http://www.theage.com.au/travel/traveller-tips/beyond-frequent-flyer-points-20091023-hd2t.html
Another interesting article:
http://blogs.theage.com.au/travel/travellerscheck/2009/11/02/itsalltoohar.html
A handy new link from our friend Stephen Saunders:
http://shoppologist.blogspot.com/2009/11/loyalty-myths.html
New article:
‘Virgin Blue has been forced to apologise to customers of its loyalty reward program after sending out an email upgrading their membership to ‘gold’ class, only to cancel it three hours later.’
http://bit.ly/4aICos
Latest from The Age:
http://www.theage.com.au/travel/travel-news/use-it-or-lose-it-qantas-tightens-frequent-flyer-scheme-20091215-ktpq.html