Customer Loyalty Program reviews: Segment 1
Posted by Becky Carroll on October 17th, 2007
Today is the first of an ongoing series about customer loyalty programs. Whether large or small, I will be reviewing various customer loyalty programs on a weekly basis. The programs could be as simple as ”preferred customer” cards or as complex as a full-blown loyalty program. Be sure to come back each week for a new installment!
The inaugural segment is about a simple customer touch that could build loyalty, or cause confusion.
Segment 1: Don’t Forget to Tell the Customers!
Hangers Cleaners
Hangers is an environmentally-friendly “dry cleaner” that uses CO2 to clean clothes instead of chemicals. They are a franchise-based company. Here in San Diego, we have been using our local Hangers for our clothes over the last year.
The last time I went into Hangers, I noticed something different on my receipt. It said, “VIP Discount, 10%”. Curious, I asked the Hangers employee about the discount. Here is how she explained it:
“We have a VIP program. When you spend more than $800, or something like that, we put you in our VIP program. We usually have special bags for VIPs to use to bring in cleaning, but we’re out right now. The next time you come in, we’ll be able to give you one.”
I thanked her and took my cleaning home.
Takeaways
1. Make the customer feel important
A “VIP” (Very Important Person) program should be created for one reason: to make valuable customers feel special. The first impression on the customer should be one of surprise and delight.
In this case, my first impression was, “Wow, I’ve spent over $800 on cleaning in the past year?! Maybe I should buy more clothes that don’t need special treatment.”
If the customer loyalty program doesn’t make the customer feel important, it may not drive the desired customer behaviors.
2. Tell the customer about the program!
A customer loyalty program won’t be effective if a customer doesn’t know they are part of it! If I hadn’t asked about the discount, I don’t think this Hangers employee would have told me I was a VIP. I still didn’t have anything to show that I am a special customer to this company.
A customer loyalty program should be introduced to customers carefully and thoughtfully. Be sure customers know that they are in the program, know why they are in the program, and know what the program will do to reward them. Every employee that interfaces with customers should be able to explain the program fully and answers questions about it.
A Branded Experience
A customer loyalty program can make a very positive impact on customers and their attitude towards the company. Every customer touch impacts the brand experience. Make sure your customer loyalty program is executed with as much care as the rest of your branding and marketing. And don’t forget to tell your customers!
(Photo credit: kirza)
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October 19th, 2007 at 4:27 am
Good work Gordon! Nice to see you get caught doing it right!
October 19th, 2007 at 4:59 am
Hey Becky – Neat observation! I like the notion of a Loyalty program being of tangible, visible benefit to people. Better than just stealthily tracking… Brent
October 19th, 2007 at 6:46 am
Darcy, thanks for commenting, and great that you called out the licensee of the San Diego Hangers stores, Gordon Shaw. Here is a link to an article on him from last year. Notice the last paragraph about how he focuses on adding value to customers – and can charge higher prices as a result.
Would I keep going to Hangers, even though I spend so much money there? Yes – their process doesn’t harm my clothes, they don’t smell bad from the chemicals, and the personnel there are very friendly and professional. But I am still going to start thinking twice when I buy clothes from now on – and minimize those that are “dry clean only”.
Thanks again, Darcy!
October 19th, 2007 at 6:51 am
Brent, thanks for coming out and commenting on my blog! It was good to meet you yesterday at the beautiful Rady School of Management as I spoke to your group.
Yes, a “stealth” loyalty program doesn’t really do all that much until it is noticed – so may as well shout about it from the beginning! Otherwise, it is not money well spent.
Thanks again!
October 21st, 2007 at 1:09 pm
I like the “surprise and delight” comment. That is exactly right.
Good discussion.
LP
October 24th, 2007 at 8:20 pm
Thanks, LP! Thanks for joining the discussion. Surprise and delight will hook the customers, and ongoing consistency of great customer treatment will keep them coming back.