Measuring Customer Loyalty with Programs is Bullshit

I’ve noticed that I have a tendency to prefer CVS as my general drug store. Now, while any prescriptions I need filled are done at Publix, I let CVS handle the generalities. But several years ago CVS did something… they created a loyalty program. At first I didn’t mind so much, they handed me card that I was required to fill out and send it in and with that I would receive “special discounts”. I went home unpacked my purchases and there the form sat for about a week until I got tired of seeing it and threw it away. But every time I go to CVS they try to give me another one. Sometimes if I just said “no, thanks” they would covertly add it into my shopping bag to be discovered once I returned home. I’ve gotten to the point now that I say, “no thank you, I have about 6 of your cards at home and I never bring a single one with me.” Sometimes I would watch as the clerk would simply scan their own cards, a ritual I could tell they had done more then once from people not wishing to jump on the card-carrying program. Some stores held a barcode right on their registers that read, “For customers not wishing to join the program, still wishing to receive the special discounts.” The stores were doing what I often refer to as “Hacking the Interface”, they had something that they knew wasn’t working, that people didn’t want, and they found a way to easily get around the policy.

The bookstore that I once frequented (and was a member of their “discount” customer loyalty program) has changed their direction in the way they wish to represent their business and the products they offer. After a few experiences with this bookseller after their makeover I realized that my discount card didn’t mean much to me if I didn’t like going to the store anymore. I paid $10 a year for that card, but the savings seemed of little value to me when I no longer enjoyed the experience of the store. I have since started shopping at another bookstore and have thrown their discount card away.

It’s About Gradual Engagement

Customer loyalty is a funny thing, something we often confuse with customer satisfaction. But customer loyalty will never be found in a card-carrying membership program or a points system. Often these programs guarantee that I (the customer) will have to maintain my information within your system to win awards that I don’t really care about, want, or that have any weight on my desire to do business with you as a company. They just stand in my way, and are annoying.

What customers want is a long-term engaging experience. Customer loyalty is created by several gradual experiences that cause that customer to continue to want a relationship with your company. Recently I purchased some Dvorak labeled covers for both my laptop and my keyboard at the office. Having not been satisfied by a previous cover I once purchased, I went to Google to find another company. The company I came across had one of the covers I was looking for but nothing for the office. I sent them an email saying what I was looking for and received an email back in about 30 minutes telling me that they were currently developing that product and that it would be available at the end of the month. He said, “Sorry we don’t have it for you now. I’ll send you an email when it’s finished up and we’ll give you free shipping on the order.” Sure enough around the end of the month I received an email from him telling me that they were available with a link to the product. Now the email could have been computer generated, but it was personalized and had his name on it, giving me the satisfaction that this individual emailed me back as promised.

So far I’ve had two great experiences with them. 1) They apologized for not having the product I hoped they would, gave me a discount on shipping when it was going to come in; and 2) Followed through on their promise to notify me when the product was available making it convenient for me to place my order. When I receive the covers, and if they are of the quality I expect – I will most definitely use them again, as the entire experience of my interactions with them have been very personable.

So what I’m trying to say is simple, the experiences you provide will build the loyalty that you are looking for. Don’t put programs in the way of buyers, most of them don’t care and find it a pain to deal with (and a poor experience by always being asked if they have their card). In a business world where things change just as fast as the technology we use to measure them it’s time to throw away our 12 year old copies of The Loyalty Effect and start building a more permanent bridge with customers that want to do business with us… not because they have our card in their wallet, but because they prefer the experience that our company provides and would come to us even while being a member of a competitor’s program.

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