Should our goal be loyalty or should it be something completely different?
By Mike Giambattista, Editor in Chief
Last year, a U.S.-based consulting firm was commissioned to estimate the size of the loyalty market globally. After some months of research, the group came back with an astonishing number: $200 Billion worldwide. Yes, that’s Billion with a “B”. By any measure, that’s a lot of money being exchanged in the name of customer loyalty.
But I’ve wondered recently if we’re chasing the right thing.
We see loyalty models all the time that are designed to provide some measure of lift, or shift or improve retention. And I’m not overstating it when I say that some of the brightest minds in business are operating in the world of customer loyalty today. Many of these models are built on tried-and-true concepts that have been proven over and over again since before the days of Don Peppers.
But I ask myself again, is that really loyalty? And is customer loyalty really what matters? Should that really be our goal?
For sheer honesty, I love that airlines call their efforts “incremental revenue programs” and not “loyalty programs”. It seems so transparent and genuine to call these programs what they actually are.
But should we even be chasing down the notion of customer loyalty?
Here are some things to consider:
Aside from the silly cocktail party debate as to whether Amazon Prime is a true “loyalty” program, Amazon has clearly unlocked the code to customer satisfaction. Is it their loyalty program (rewards) or is it their off-the-charts customer satisfaction that is driving their growth?
I have a few brands I love. I love what they stand for. I love their products. I’m a “believer” in their brand (whatever that means). But faced with the choice between brand adherence vs a very satisfying purchase / ownership experience, I’m probably going to choose the latter. What about you? Think about that for a moment.
I’m a card-carrying member of several airline miles programs and, overall, I find myself eager to spend with those airlines that are going to reward me somehow. But when I consider the ease, simplicity and fun (think, satisfaction) of traveling on certain carriers, I’m suddenly re-weighting my so-called “loyalty” to the other airlines and am thinking much more about ease of travel than I am about accumulating another handful of points.
Note, I’m not even calling it “customer satisfaction” – just satisfaction. Lets, for a moment, let the word stand for what it actually means. Are your customers “satisfied” when they deal with you? Will they go home and remark to themselves that they are truly “satisfied” with themselves for dealing with you?
So I’ll pose this question: what is a more powerful purchase motivator for you, personally – loyalty or participation in a self-satisfying experience? I’ll wager that, if you’re really honest with yourself, you’ll lean toward satisfaction just like I do.
Did I just reopen the age-old “rewards vs experiences” argument? I hope not. But sometimes it’s good to look outside of the rules engine for perspective.
Mike Giambattista is Editor in Chief at The Wise Marketer and is a Certified Loyalty Marketing Professional (CLMP).