Loyalty is earned, not bought

This is a guest post from Mitch Joel — President, Twist Image and author of Six Pixels of Separation. See the original post this is adapted from and more like it on his blog.

This will not be about how to game a system so that you can redeem a free flight. Sorry.

When most people think of earning loyalty points, they think of their loyalty cards. They think of spending money that is then accrued into a virtual account, where the dollar amounts are assigned some strange point structure, and if they spend a lot of money, they can save up those points and redeem them for a free flight (or other goods and services). People complain all of the time that this point accumulation is useless because the flights that they would really like to take are never available. The brands behind these loyalty programs are capturing tons of valuable data in what is perceived as a fair trade.

What if we looked earning loyalty points differently?

What if loyalty was less about how much a consumer buys, but the bigger win is that the brand earns loyalty points for doing the right thing for the consumer? How do you think a program like that might work out in the end? In June, I had the pleasure of attending the Canadian Marketing Association‘s Social Media conference in Toronto. The morning keynote session was Martha Rogers (from Peppers & Rogers Group) talking about her new book with co-author, Don Peppers, titled, Extreme Trust – Honesty As A Competitive Advantage (Peppers talked about the book in this podcast with me back in May of last year: SPOS #253 – Don Peppers Looks At The Future Of Marketing). I found her presentation extremely frustrating. It’s nothing that Rogers said or did (she is a fantastic presenter with amazing content), it’s that the net result of her presentation is this: why don’t brands act in the consumer’s interest?

Why don’t brands act in the consumer’s interest?

It bears repeating, doesn’t it?

Intuitively, we know that brands that build true trust and credibility are the brands who spend each and every waking moment ensuring that they are removing all of the friction that comes from their buying (and post-purchase) experience.

The paradox (and the part that really frustrated me about Rogers’ presentation) is that the brands who do this well are few and far between (go ahead, start building your own list and you’ll see how quickly you run out of steam). And, it’s not like the brands that get this right are not profitable (see: Apple). And, it’s not like the brands that get this right don’t often make mistakes but are still perceived to be great (see: USAA). And, it’s not like the brands that get this right are small or medium or big… size has nothing to do with it.

We are trapped in dogma.

That was the truly depressing part about it: Rogers asked the audience how complicated it is for iTunes or Kindle to let you know that you’re buying a book or a song that you already have, so you don’t pay for it twice? It’s not that difficult (and they do it smashingly well), but most brands won’t do this.

Rogers asked the audience why mobile companies don’t call their customers up to help them change their plan, so that they can save more money? Think about that one: would you switch to another provider if your mobile company did that because they actually cared? The thing about dogma in marketing is that we’re running everything day-to-day and week-to-week. We need the sale today to make our numbers tomorrow, with very little optics and care towards the true endgame: long-term loyalty and customer lifetime opportunities.

Buying loyalty.

My big takeaway is this: The mass majority of brands are trying to buy loyalty (and this can be as small as asking someone to like them on Facebook to as major as getting a customer to sign up for a corporately-owned credit card because of the promotional goodies that come along with it), but loyalty (true loyalty) can’t be bought. It’s something that brands earn — each and every day — and it’s reflected in everything from how they promote their wares to how they communicate with consumers through channels like Twitter, YouTube, and Facebook.

Brands have every good intention to be great, but the general attitude is about being great today — in the moment — instead of being great over the entire customer experience. It’s too bad that brands treat loyalty like a points game and not like the ultimate goal towards a truly great consumer experience.

What the world needs now is more brands that act in the consumer’s interest.

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About Mitch Joel

Mitch Joel is President of Mirum — an award-winning Digital Marketing and Communications agency. He is also a blogger, podcaster, journalist, speaker, and the author of "Six Pixels of Separation" and "CTRL ALT Delete." Mitch is frequently called upon to be a subject matter expert for BusinessWeek, Fast Company, Marketing Magazine, Profit, Strategy, Money, The Globe & Mail, and many other media outlets.

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Comments

  1. Paul

    Marketing isn’t about building brand loyalty, its about getting new customers. Social media has changed that focus some. The companies that do social media well are focused on building loyalty and retaining existing customers. Companies that don’t do it well are focused on trumpeting the brand and getting new customers.

    Social Media should not be a marketing function, in the current structure of corporate marketing. It should be part of the customer service function. If companies are able to change their marketing focus to encompass customer loyalty, then they may find that they are also getting more customers. Not because their customer loyalty programs are directly reaching non-customers, but because their loyal customers are now talking to their friends and relatives about the great companies they do business with.

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