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 When I spotted Bernard Chung’s Get serious about Customer Loyalty: you will save more than just customers, I considered scrapping my draft, but then thought my personal perspective on loyalty programs might help continue the discussion on what he and I both think is an important and timely topic. So if you missed his post, published August 30, do be sure to go back and read it.

According to an article I read recently in The New York Times, a recent study found that the average household in the US belongs to 14 loyalty programs, but is only active in six of them. I guess I’m a bit above average there; while I’ve got 14 of those little membership gadgets on my keychain, and I am active in 6 or 7 of them, I also have seven more travel-related membership cards that I don’t carry around every day, and three more membership cards in my wallet.  So I consider myself pretty well versed in a variety of loyalty programs today.

I am also a pretty loyal customer even without a loyalty card. but I do expect to be kept satisfied, and there is the rub. You’d think in this economy, keeping long term customers happy and coming back would be a priority, but in my experience, as the song goes, “it ain’t necessarily so.”

After getting several text messages thanking me for being a long-time customer, I went in to the local mobile service store to see about the “special deals” they had for me. I checked out several models and selected a new phone, but I made a point of mentioning that it was important to me to be able to use the phone outside the US.  Oh, no, definitely no trouble with this phone, she assured me.  The vacation was wonderful, but in all four countries all I got from my new phone was “no service.”  When I went back to the store, the manager was very apologetic; sorry, this model of phone is unlike all the other phones we sell. It doesn’t switch from 3G to 2G automatically; you have to change the setting here, and he walked me through the process. I asked him, when I made a point of mentioning how important it was to me to be able to use the phone in Europe, wouldn’t that have been the right time for the sales staff to tell me about this key technical difference? When sales people do not understand key information about new products and communicate it to customers, what does that say about information and service at the organization?

The New York Times article mentioned that airlines are sweetening the deals for some of their reward redemptions, but only for the top tier of their “elite” customers. Those of us in the lower rungs are lucky to get the service our so-called “status” is supposed to provide. When we were traveling on an alliance partner airlines, not only was my elite status not noted on our boarding passes, we could not even check in at all in the partner airline’s kiosks. It seems that the information about flight changes had not made it from one “partner” to the other.

On the other hand, the service and selection at my favorite supermarket are outstanding. They send letters of appreciation to the members of their frequent shopper club, with significant discount coupons attached. A few weeks back, the manager in the checkout area noticed that I was frowning and asked if he could assist me.  I explained that I had looked all over the store but couldn’t find the very tasty spiced nuts I had bought the week prior.  After making several phone calls he very apologetically explained that those nuts had been a special item, brought in the one week only, and he suggested I try some others. Reluctantly I picked out a container, and he promptly noted on the box that they should be rung up at no charge, his compliments. Not only that, but now the store is carrying the spiced nuts regularly. Now that is service.

How do you communicate with your most frequent customers? Does the sales staff get the information needed to seal the deal and keep those customers coming back for more? Do the front line staff go out of their way to please? Does everyone have the information tools they need to keep customers coming in the door and the sales staff closing the sales as the global economy is starting to come around?

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  1. Vijay Vijayasankar
    I have been at the very top of an airline loyalty program’s elite level for several years, and still cannot understand why Lufthansa boarding passes won’t get my elite status automaticaly unless I explicitly tell them to put it in there. I have complained a million times – but not much has changed. However, this has not stopped me from using star alliance flights. I still like the bonus miles, free upgrades and free lounge access and other perks- and hence will put up with some bad service. I am sure airlines know this only too well – and hence they might not have a great incentive to do better.

    Amongst the big players in a consumer market – I suspect there is very little that separates the top few (mobile phones, pet food and so on). So either they all do an excellent job, or they all suck. These guys are quick to respond and bring back an equlibrium  if any one of the top 3 tries to differentiate.

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    1. Gretchen Lindquist Post author
      That is very interesting that your experiences regarding your elite status not being recognized by so-called “partner airlines” are essentially the same as mine. It certainly does seem that the airlines take us for granted when they can so shamelessly advertise loyalty program benefits that are not being delivered, for whatever reason- incompatible information systems? Lack of effort? Who knows? If there is no incentive for improvement, I suppose it will continue.
      Thanks for your comments!
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  2. Richard Hirsch
    I’m always reluctant to join such loyalty programs, because I’m afraid of what is happening to my data.

    Just had an idea: What about giving users access to their own data. Create a few choice dashboards of what they purchase and when. This would be a new level of customer service. This is possible in airline-related loyalty programs where you can check out flights you’ve made.

    This reminds of a NPR podcast I just heard about Walmart. It seems that long ago only suppliers had detailed purchasing-relevant information about their products. Walmart built up their own barcode-based IT infrastructure and took control of the information that was originating in their stores.

    We need something similar in supermarkets and other consumer product-based environments. Our purchases produce a huge amount of data that is largely hidden from us.

    Let’s liberate this information.

    D.

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    1. Gretchen Lindquist Post author
      Dick,
      I’ve heard that concern from people, and I’m just curious about what harm might come to me because the supermarket, pharmacy, and gardening shop are tracking my purchases. More junk mail/ junk email? Probably, but is that all? I can live with getting Kroger coupons in the mail. Maybe it is the fatalist in me, but it seems to me that everything is online these days. All of my American Express charges are there, which they could easily sell to their merchants and catalogue retailers. Maybe I’ve just given up on some levels of data privacy.

      I do really like the idea that the tracked data should be made available to the member, and I am going to inquire about it at the supermarket’s loyalty program web site.

      Thanks for your comments!

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