[Part of ‘Marketing Tips for Small Businesses’ series started by Mayank, head of marketing at Redbus. This opinionated article dwells over the concept of loyalty points started by most of the organizations and whether they are useful or not. Do share your opinion/comments.]
Earning loyalty
Lots of companies are giving away points in the hope of luring customers. They also call these their ‘loyalty program’. That’s cute. Let me set out my disclaimer once again before I share my views on loyalty. This article is just my opinion and not a scientific fact.
So, the way I look at loyalty is very different from the loyalty programs that are run by various organizations and brands. If I were to benchmark loyalty for a brand, I’d do it against Harley Davidson. It is one thing to keep buying a brand over and over again and quite another to have it tattooed against your arm/chest. Now, that’s loyalty.
That’s what Harley Davidson enjoys and a little toned down version is what Enfield enjoys among India bikers. There’s a different bonding between two Enfield-riding strangers that meet at a signal. They share a smile that says “you’ve got taste too”. That silent advocacy is a sign of loyalty to the machine they own and love.
Loyal Dogs or Loyal Customers?
Sure, the category is also such that it is a very personality-defining product and therefore enjoys that sort of prominence in a customer’s life. There are very few categories and products that can occupy such prominence. Sometimes you may find categories that shouldn’t have that prominence, but the high-end brands in that category will enjoy that status. An example is the mobile category and the iPhone brand. You won’t get two guys owning Nokia phones strike a conversation at a party over their phone, but in all likelihood, two iPhone owners may start discussing their favorite apps.
My belief is that a brand should not try to own a customer’s life anyways. You can’t expect a customer to dream of your salt / wheat brand before she sleeps and after she wakes up. That’s just being stupid. All you need to ensure is that when the customer has salt, it’s your salt’s taste that he likes. If he wants airline tickets, it’s your site he logs on to because he gets the best fares. If he wants a formal trouser, it’s your trouser fit that he finds comfortable.
As long as your brand lives up to its promise and delivers on it consistently, I guess you’ll have your share of sunshine.
Once again, it boils down to product excellence and the expectation from the brand. I had praised a radio-taxi brand to a friend so much because of my great experience with them that when he tried reaching them to book himself a cab, he was disgusted since he was kept on hold for 2 minutes! He probably wouldn’t be as pissed had I not built it up in his head. That’s the challenge service-delivering organizations face. Their processes and delivery mechanisms have to work at clock-work precision and expectation levels.
There’s only one person who can decide whether or not he’s loyal to your company and that’s your customer. I don’t think a few points or some discount can earn loyalty. It can earn your company a trial, an extra purchase and many more purchases, but that doesn’t stand the acid test – will he walk out of the store if you’re not on the rack even when a competitor is selling at a discount? I’m sure die-hard Nike fans do that.
Want loyalty? Get a Dog!
Here’s a great conversation between one prospective employee and an HR manager.
HR manager: How long can do you think will you work here?
Interviewee: I’m not sure. As long as you keep me happy, I’ll hang around.
HR manager: I’m just trying to understand whether you’ll be a loyal hire.
Interviewee: If you want loyalty, get a dog. I work for money!
It’s quite similar for customers. No one likes to be called loyal unless the brand really deserves their loyalty. You’d hate to be identified loyal to some sub-standard product.
They work for value. Only a great product or a service delivered greatly can live up to that promise.
What’s your opinion?
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Hi Mayank, Interesting Article. I have a different take. “Loyalty Programs” should not be treated as something that is done to “Earn Loyalty” – but should be done with a view to “Reward Loyalty”. The entire paradigm – then changes. The these Programs are not about creating loyal customers – but more about how do I give that extra something to customers who purchase my products often, who advocate my products to others. Unfortunately most of these programs have boiled down to ‘points’ – which is the most basic stuff that any marketer can do. We need to be creative, understand the client / customer profile, engage them and then come up with suitable alternatives to reward the customers.
Loyalty programs are an interesting concept. All the things mentioned above are true in certain scenarios.
Example of Harley certainly diminishes the value of loyalty program. Nobody will buy a second Harley to earn certain loyalty points. So in this scenario it may not ‘earn’ loyalty but you can always use the loyalty program to ‘reward’ loyalty of current Harley owners.
Let’s take example of airlines and assume all the airlines or alliances have loyalty program. In this case loyalty program may not even give you a trial but once you have a trial to your airline and have the customer signed on to your loyalty program, you are on your way to earn loyalty. You give your frequent fliers competitive prices, priority boarding options and allow upgrades to first class. So in a way its your loyalty program which has ‘earned’ you the loyalty.
So…it depends
Hi,
This is an interesting article.I like to say that whatever it is at the end of the day customer is the king