Loyalty simply isn’t what it used to be
Rob Morrison thinks it’s time the ‘loyalty paradox’ becomes the ‘loyalty parallel’.
So I celebrated a birthday recently (no, I’m not going to tell you the number, don’t be cheeky). Along with being spoiled by my little family, usually the day brings a series of comments and likes on Facebook – my friends use it as the modern birthday card. It feels good. Uplifting even.
Trouble is this year, Facebook forgot my birthday.
You see among the iOS updates and privacy warnings and app uploads, my ‘settings’ locked my birthday. So it wasn’t published. I think it was my fault. Probably.
But here’s the thing.
As much as I tried to ignore it, I felt just a tiny bit betrayed. My ‘one day of the year’ was just a little less enjoyable. More importantly, my loyalty to Facebook took a hit. I felt like I was the ‘needy’ one in this relationship. You know, logging on more than usual. Checking every few minutes to see the error had been spotted and fixed.
The whole experience made me uncomfortable. Like I was way too reliant.
It got me thinking about loyalty in modern marketing – beyond the loyalty cards and points schemes. True loyalty. When I was studying marketing (yes, in the dark ages), we talked at length about the ‘loyalty paradox’. That’s where the more loyal your customer, the less you need to spend to keep their business. You could do just about anything to a ‘rusted on’ customer and they would forgive you. Even forget an important milestone.
We segmented databases based on it. Created ladders and pyramids and circles. And used it to plan our spend. In the 90s and noughties it worked pretty well. Customer A had no way of knowing what customer B had been offered. So it was easy to offer more to the less loyal. Because we could do it quietly. Discreetly.
But in a socially connected world, discreet is extinct. Everyone knows everyone’s business – the Kardashians have turned ‘indiscrete’ into a very profitable business. Now the ‘rusted on’ loyal customers can see others getting a better deal. And they’re not happy.
Instead, we need to look at loyalty as a ‘parallel’ not a ‘paradox’.
That’s where we spend the same (if not more) on those most loyal to us. Think of it as rewarding those loyal customers who are more likely to share, spruik and promote on our behalf. And in the socially driven, customer-empowered world we live in, they are our greatest marketing weapon. They’re independent. Believable. Trusted.
Clearly there’s been some very high profile changes to Australia’s high profile loyalty programs recently – with heavy-spending supermarket brands rethinking their entire loyalty strategy. I just hope part of thinking is making sure those at the top of the loyalty tree are getting their fair share of the fruit.
And, whatever you do, don’t forget your customer’s birthday.