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I am talking about the generously distributed pieces of plastic, sometimes even without a name.
I was handed 1 at M&S Delhi India last week. It has a card number that will get me a 10% discount on my birthday and wedding anniversary day. (off topic – I am single, so I registered my brother’s birthday as MY wedding anniversary date. But it goes to show how much we think before we devise these programs). Coming back to the topic I call this M&S and most other cards in the market today ‘PROVE YOUR LOYALTY’ cards.
M&S added a number to their database of ‘loyal customer base’. Did they? For me, signing up was an impulse act. Like one of those things you buy on sale and never use. My so called loyalty cards sit in a card holder that I never carry. Because they demand actions to ‘prove MY loyalty’ towards them. I am expected to be loyal all because they strung a dog tag (with a card number) on me.
Spend a certain amount with us before we start acknowledging your presence. Maybe give you a card with you name embossed on it.
Loyalty programs today are designed to force ‘customers to stay loyal to brands’ instead of ‘rewarding them for being loyal’.
Honestly you can never make a customer loyal to a brand. When was the last time you heard someone say I buy from M&S because they have the best loyalty program? Best reward structure?. Even if you did it is just a matter of time before someone outdoes that reward program.
How about… Make Mr. Verma feel so fantastic about being a loyal M&S customer that he ends up talking about it so the audience he is talking to wants to shop at M&S. Makes sense? No!? Yes?!
Here is how I look at loyalty programs:
Most brands are in the transactional space. Yes, there is a small segment of customers who enjoy the thrill of collection and redemption of reward points for merchandise, airline tickets etc. But given the tedious process of points redemption, most customers I have spoken to in the last 2 months just want upfront % discount on purchase.
Forced loyalty in a pretty pack:
Then there are the ones that give you exclusive mostly experiential benefits.
But the most gorgeous loyalty programs that are true to the words, work at building a relationship.
Example: Beauty Insider program from the french cosmetics retailer Sephora collects information and extracts insights about customers to offer a loyalty program with curated choices, customized special products and personalized gifts on important occasions, such as birthdays.
Yes it is expensive. But who asked you to own 2million loyal customers. The number of people YOU tag as loyal customers are not even loyal. A customer does not become loyal because of the dog tag you gave them.
Loyalty is rare!
If you think I should be rewarded for being loyal to your brand, mean it. Else, dont bother wasting all that money on building a program to tick a box in the marketing plan.