Friday, 10 October 2014

Money can buy you love: loyalty marketing

Loyalty programs seem to be on the rise again. To be honest I have always struggled with them. The gain seems to be too little over too long to bother. And the ones I like are the ones that give me things for doing nothing, or more to the point nothing more than I would have done anyway. Which rather defeats the purpose of a loyalty program. They should change behaviour.

How many people have cards for Sainsbury's, Tesco and Co-op. I need to find out. But I did observe a couple in queue at co-op exchanging vouchers then 2 days later in Sainsburys waving the reward card. I only clocked them because they took so long discussing the virtues of a co-operative organisation. They clearly admired the co-op but not enough. 

I only went there for my daily special brew top up. 

With a few caveats the secret to loyalty is doing what you do very well. Good product, good price, good service and easy. Easy in that your brand is the path of least resistance. 

Talking of easy. I am not a fan of easyJet but I tend to think of them first for local flights, I know my way round the website. I go there before I go to skyscanner. It is the default. That's what your aim should be. And if you cant be the default, make sure it is easy to engage with your brand. Remove the hoops. 

Of course it always help if they like your brand. 

But what I find interesting is the emergence of paid for loyalty schemes. When you pay for something you have sunk costs, so to that extent you are going to make sure you use it. Hey presto. Behaviour change.

Intercontinental have run ambassador club for yonks, very successfully. But it is a profit centre not just a cost to the business. Guardian have launched their new membership program https://membership.theguardian.com not sure it is a loyalty program, but it looks like an interesting value exchange with customers, so may be it is. The other interesting thing about paid for programs is that consumers defend and advocate them, after all you can hardly buy in to it and say it is crap. 

So perhaps the secret of loyalty is just for businesses to what they do well, don't expect people to value what you hand out for free. 

But remember maybe money can buy you love. 

2 comments:

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  2. Great thoughts you got there, believe I may possibly try just some of it throughout my daily life.

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Just curious about marketing, psychology, economics, business, irrational behaviour, people, models, communications, advertising, market imperfections, b2b marketing. I work in the marketing communications industry for OgilvyOne.