Loyalty is an emotion

There’s a lot of buzz in the loyalty space these days.  More and more brands are rolling out new or re-structured programs.  The mobile world is rife with clever consolidation apps and new aggregation schemes.

There’s nothing inherently wrong with any of this.  Using reward points to more effectively manage your promotional budget can be a savvy strategy.  And if you buy into the notion of treating different customers differently–and want to execute your strategy at scale–you need an efficient way to uniquely identify customers and deliver personalized interactions. Rewards and frequency programs can form a strong customer growth strategy foundation.

But don’t confuse requiring customers to use your program to get the best price–or bribing them with extra discounts to capture their next transaction–with loyalty.

The loyalty that matters, the loyalty that is actually profitable and enduring, is what compels your customer to be your best advertising, to proactively advocate for your brand within their tribes.

The loyalty that matters is when customers give you another chance when you screw up.

The loyalty that matters is when they choose you over the cheaper competitor.

The loyalty that matters is when they willingly and generously invest their time to collaborate with you to improve your brand’s customer experience.

Go ahead and track all sorts of customer activity measures but don’t lose sight of the essence of loyalty.

Loyalty is an emotion.

You can brag about the sheer number of members or the % of sales that come from your program.  But that’s largely meaningless if most of your members would readily shift to the competition for a slightly better price, if few of them consider you their brand of choice, if only a handful are touting your brand to friends, family and colleagues.

Great brands like Four Seasons, Apple and many others thrive without any sort of rewards scheme.  When they face a customer issue, or increased competition, their first instinct isn’t to throw more coupons or more points at the problem.  And that shouldn’t be yours either.

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