Saturated Loyalty

Published On November 30, 2009 | By mbalogh | Blog

Lately I’ve been hearing a lot about loyalty programs, their goals, and their objectives so it’s got me thinking about loyalty in the age of new media marketing.  Traditionally loyalty has been about repeat business — getting happy customers to come back — however, in the age of information, optimization, and saturation, I see it going a different way.

Friend #1 is a coffee drinker.  Sure most of us drink coffee but few of us do it as a hobby so, when I say she’s a "coffee drinker", what I really mean is she’s a very particular coffee snob who knows exactly what she wants in a cup of joe and is delighted when she gets it.  Few things make her day better then a good cup of coffee so you’d better believe she knows exactly where to get one.

Friend #1 needs very little encouragement to come back for another cup of coffee.  Enrolling her in a traditional loyalty program is actually bad business because she’s going to come back anyway.  You’re lowering revenue to reward her for doing what she’d do anyway — drink an excellent cup of coffee.  In her world she’s not loyal to you at all; she’s loyal to the coffee you serve.  She’s your customer because you loyally server her needs.  The relationship requires your loyalty to her, not the other way around.  If you stop serving good coffee it won’t matter how many holes are punched in her member card.  She’s already optimized her time and budget.  She can’t possibly drink another cup.  She’s saturated.  So now it’s time to ask yourself, how can we take this relationship to the next level?

Friend #2 is a business traveler.  She travels *a lot* for business.  By plane, by car, hotel stays, restaurants, the complete gamut.  Week-to-week, month-to-month, she’s "on the road".  Friend #2 also needs very little encouragement to come back, because she has to — it’s her job.  Her loyalty program is her company paying her to travel.  If they’re not paying her, she’s not traveling.  She needs no encouragement from you to travel more because, in fact, her goal is to travel less.  Once again, all your traditional loyalty program is doing is pulling money out of your own pocket.  She can’t or won’t travel any more than she already does and in this economic climate her travel choices are 80% her company’s budget and only 20% her convenience.  She’s saturated.  So, again, now it’s time to figure out how to take this relationship to the next level.

New media is not about controlling the message or changing the behavior of the consumer.  It’s about understanding the behavior of the consumer and facilitating their message to others.  The consumer life-cycle jump between customer and repeat-customer has been replaced with the conversion from customer to advocate.  Control is traditional, relationships are current.

You’re not going to get friend #2 to travel when she doesn’t have to.  This is her behavior — how can you use it?  How about encouraging her to give away her loyalty rewards?  Create a new loyalty program that benefits friends and family.  She’s already saturated with loyalty, but her friends and family are not.  They still think travel is fun and exotic.  Facilitate her to benefiting them.  It will make her happier to serve her friends and make her friends happier and more loyal to you.

Friend #1 is passionate about coffee so the jump to advocate is not a far one.  This is her behavior — what can you do to energize and facilitate your already passionate customers?  In this case enabling free wi-fi was a great start, but encouraging them to use it for your benefit is the next step.  Engage them to utilize their social network.  Encourage them to let their friends know where they are, what they’re doing, and the joy it’s bringing them by utilizing twitter, facebook, and other social networks.  Friend them and add benefits to spreading the word when they use these tools — maybe bonus points when they tweet your promo code of the day.  Take a lesson from friend #2’s industry and reward her for bringing a friend — buy multiple cups at once and receive bonus recognition.  Encourage her office, who currently purchases coffee in a disparate manner, to organize and designate a coffee buyer.  Facilitate by allowing them all to order and pay online with a single designated pick-up person.  Same behavior, she still gets her coffee, but now you’ve got new loyal business.

Today’s new media is about the social network — your’s and your cusomers’ — so engaging them directly is only the first step.  Rethink your loyalty programs to encourage and facilitate them engaging theirs.  That’s where the real power of new media is.

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