Monthly Archives: July 2016

Old-School Loyalty Tactics Don’t Work Today

mobile-loyaltyConsumers today are the savviest generation of purchasers in the history of American commerce. They have been taught to seek value, price-shop and force companies to go after their loyalty, sometimes to the detriment of the business.

The “Buy 9, get the 10th free” type of programs create customer traffic, but they do not create loyalty. These programs turn your business into a discounting business. You now have taught your customers you compete on price, not quality.

Starbucks originally taught their customers to buy their products based on value (who ever heard of a $5 cup of coffee pre-Starbucks?) and attracted millions doing so. Starbucks customers were tremendously loyal.

And then Starbucks implemented an old-school loyalty program.

Like most companies that use such programs, they realized this didn’t really bring in much new business, rather it turned loyal quality customers into price shopping customers. Once Starbucks realized the cost of their program, they tried to tweak the reward levels and suddenly loyal customers were upset because they weren’t getting their rewards.

These types of rewards programs create loyalty to a program, not the brand. What happens when the loyalty program ends? You will lose your brand-loyal customers you turned into program-loyal customers.

Get away from the generic one-size-fits-all type of programs that work with a handy dandy app. Get personal. You know who your loyal customers are. You know what their favorite choices are of your offerings. Why not surprise them with the occasional freebie as a thank you for being a loyal customer? These types of individual awards based on the person create relationships that build the type of loyalty you are looking for.

Which would you rather have: an app customers can use as a scoreboard to track their rewards, or a person who is dedicated and loyal to your business because of your quality of service and products? They don’t have an app for that.

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