The Loyalty Leap: By Bryan Pearson; Portfolio/Pengiun/2012; $25.95 ( online buy link)
Loyalty is easier acquired than retained. All the big enterprises from airlines and hotels to branded stores and web malls know that it is relatively simple to sign up customers into loyalty clubs at first or second encounter. But then the customers start to compare. They get tempting offers from rival loyalty programmes. Sometimes they hedge their bets by joining multiple loyalty schemes. I myself am a member of four airline frequent flyer clubs – two domestic and two international -- because there is no way one airline or even an alliance of airlines is going to cover all my flying needs. So why not have a back-up or two up one’s sleeve.
This is fine from the customer’s point of view ( though I do have a problem when I can’t bundle the miles from multiple programmes to redeem them for a long trip). But think of this as a challenge for the airline or for that matter of any loyalty offering. Bryan Pearson does just that – and he should know. He is the president and CEO of LoyaltyOne, a respected international name for loyalty strategies and programme advice. He heads six global enterprises including the Canada-based AirMiles rewards programme and after 20 years in the business , has crystallized the challenge of loyalty schemes into three Vs – Value, Visibility and Voice. Give the customer real value, not humbug; drill deep into your customer data to make his or her preferences visible – and create a platform for communication with your customer.
Enterprises who have successfully ‘mined’ their customer data have reached rich rewards: If you are a member of Mileage Plus, United Airlines knows whether if you will spend $25 extra to check in a suitcase. Verizon’s phone records tell them how often you call your other. Hilton knows the instant a regular gues checks in, whether he or she prefers a higher floor or a non smoking room.
This is the crucial difference between just collecting data and putting it to productive use, turning customer information into customer intimacy.
But Pearson is also a realist – and admits that customers can only be acquired, churned, and reactivated so many times before they get bored with your brand and feel footloose, ready to move on. The Loyalty Leap tries to suggest how this loyalty period can be stretched to the maximum.
Technology is often the key today. Location based marketing, online real-time tracking, are just two currently popular tools deployed to reach customers where-ever they may be. The four key behavioural dimensions of the customer can be likened to four doors marked Spatial, Temporal, Individual and Cultural. Seal these four doors, Pearson suggests, and you have successfully transformed the customer’s material loyalty ( for whatever goodies you offer) to one of emotional loyalty ( in good times and bad).
The Loyalty Leap is a racy, stimulating read for anyone who has to work on the marketing side of the Loyalty game – and I dare say for many ‘loyal’ customers as well.