'Loyalty programs' don't compensate for poor service
Blog

'Loyalty programs' don't compensate for poor service

How often have you been to a reputable store or service company, hoping you will get the right product with the pampering service you feel entitled to as a ‘regular’ - or shall I say ‘true loyal’ customer? Instead, you are quickly disillusioned by the lack of proper attention, poor display of product knowledge, and bare minimum service.

Yet as you proceed to check-out, you will proudly present the store loyalty card to earn points. Points that you will likely forget about, or lose track calculating and translating them into an actual return of value on your loyalty.

This is probably the only positive note you will take from your visit, having spent a substantial amount of money in a short amount of time. So, you leave without feeling as though you have been recognized as a true loyal customer.

The question that always arises when facing situations like this is:

“Why do these companies invest so much in building loyalty program systems and fighting for share of voice, and so little on building a genuine, simple yet efficient service experiences that delight customers?”  After all, it is the little things that count, right?  “Why these companies spend so much energy & money on building loyalty program systems and spend large advertising & promotional budgets to fight for share of voice and so little on building a true, simple yet efficient experience that delights customers & makes them spend more money, repeat their visits and refer friends & peers?”

Why don’t they invest their resources in better recruitment, competitive salaries, better work environments, incentives and training to engage their staff? Why don’t they try to understand and recognize their customers’ needs, aspirations and expectations, and deliver on those consistently?

Treating the staff and the customers equally poor seems like a bad retention strategy, which these companies believe can be compensated by offering discounts or rewarding customers with a Chinese toaster for spending the equivalent of the latest iPhone!

Covering up poor customer experience with ‘points’ won’t retain customers. Good service will.

Companies might think that they have customers trapped in their loyalty program and this will eliminate the need to invest in improving or innovating the aspects of the service experience that matter most to customers.

This business myopia presupposes that the company is in a monopolistic situation or has a unique offering that brings in clients, regardless of service quality.

Very few companies are so privileged, but if one compares their loyalty schemes, most of them are almost identical and offer no true competitive advantage!

So, what does collecting points achieve when all the important milestones of the experience are less than satisfactory? Not much, beyond pushing customers to establish an opportunistic relationship with these companies based on deals and bargain hunting.

Services can drive loyalty up. Or down. People will come because they like your product, but leave because they detest your service.

True loyalty cannot be bought. It must be earned!

Customers do not actually consider their purchase of a product or service as ‘loyalty’ to a brand – they are loyal to their own needs – selecting what works in their best interest. Yet, strangely enough, companies still invest billions to ‘buy’ their customers’ loyalty.

Most of today’s programs barely go beyond a transactional relationship, which is based on a superficial understanding of customers. Designing generic or ‘off-the-shelf’ schemes that do not excite customers, and sending out mass emails or SMS offers (that often end up in junk mail) are insufficient.

Good service is a powerful way to identify, attract, retain and grow true brand advocates. A better customer experience, including simplified interactions and a feeling that the brand actually cares, would lead to true loyalty that generates consistent revenue growth and costs less to establish.

Never assume. Observe and talk to customers in order to understand them.

Use service design and customer management tools in conjunction with the data you collected to make their lives easier, to give them personalized treatment and to provide them an experience that reinforces the relationship they have with you. Interacting in such a mindset with a customer is the best way to build a lasting and lucrative relationship.

The most commonly practiced customer engagement bait are the discounts or earned points flashed in front of them.  However, the majority of customers say that what they really want is special treatment and well-tailored offers. They want to feel like they matter to your company.

Amazingly, the majority of companies accumulate but do not use customer and loyalty program data to develop a proper customer engagement strategy.  This strategy should outline why, when, how the company is to connect with its customers to provide better experiences.  Without such a strategy, it would be exceedingly difficult to build stronger relationships with their customers that leverage their lifetime value.

Think ‘customer first’ by mapping a solid and differentiated customer experience strategy, and enjoy the kind of loyalty that generates greater share of wallet, lower costs to serve and the opportunity for customers to share their stories of your brand with families and peers.

Active bloggers View all (19)