Loyalty is a two way street, or it should be Direct Magazine June 28, 2000

The scene is childhood in the 1950’s. You’ve just come home from a trip to the supermarket with your mother. She passes you a sheet of little green stamps and a book to stick them into. Finally, after weeks of collecting and licking and sticking stamps enough books are full to warrant sitting down with the catalogue of all the neat stuff you could “buy” with the books of stamps.

For those of us too young to have participated in that primordial, philatelic pastime, let’s fast forward to the mid ’80’s. In droves we joined the ranks of”frequent flyers”, flitting from airline to airline to take advantage of the latest promotion for triple miles between Oshkosh and Oshawa. It was fun…for awhile.

Then came the ’90’s   sales slid…costs climbed…profits peaked.

Suddenly, like a virulent contagious disease that remains undetected until the emergency wards fill up, the dernier cri was unleashed on an unsuspecting consuming public…customer loyalty programs! Things to collect like membership cards, points and more points. Stuff to receive like newsletters, free samples, special services. Places to belong like clubs and circles. Wonderful words to describe you like Premium, Select, Priviligé. You and your peers, whoever they are, from kids to seniors.

Cookies, coffee, cat food, credit cards or cars, it seems no product is immune (or not for long) from the scourge of customer loyalty programs. In fact, I’m sure it could be a full-time occupation just keeping up with them all.

” But, but, but…”, I hear the marketing managers sputtering. “We have to get customers to stay with us. We have to compete. We’re building a database that allows us to track customer behaviour around the clock. We have all this information at our disposal. Look at this powerful new program, these prestigious new premiums, our bountiful new benefits. We’re giving away gifts. We’re giving away goodies. We’re giving away margin…”

You’re giving away the farm.

Know why? Loyalty can’t be bought. At least, not for long.

Not to mention it may all just be getting to be a teensy bit much too much for people to take. In medicine, when the disease takes over the patient dies. In marketing, when the customer reaches overload…you know what happens next.

Let’s put on our consumer hats for a minute. I ask, “Hey, Marketing World! This is not only about my loyalty to you! What have you done to deserve my loyalty? You’ve pushed merchandise at me. You’ve mailed me more stuff than I ever care to read. You’ve invaded my privacy. I’ve got a wallet full of every conceivable form of membership identification. Every breath I take, every move I make has been data captured, data processed and data based (or may be it’s de-based). Hello, out there. Anybody home?”

All I, and, I think, most consumers really want from a “loyalty program” is:

  1. To perceive that what you’re trying to get me to do has some genuine substance and relevance for me…personally. Too often marketers seem to assume people are just sitting waiting for their first next bright idea. Wrong. My life has context and texture and a lot going on in it. That wonderful database will tell you all about it. Now, what are you going to do for me that ninety-nine others won’t do?
  2. Not to have to work at this loyalty thing. Just make it easy for me. Don’t ask me to remember to carry goofy little cards around, or make me wade through encyclopedias of instructions and wait weeks and weeks before collecting “my rewards”. Relationships with my nears and dears keep me busy enough, thank you. Don’t ask me to go out of my way to work at one with you, because I simply won’t.
  3. A little love in your heart, as the old song goes. OK, that may be pushing it, so I’ll settle for a little empathy…human being to human being. The target market of one. What that looks like is well-researched, substantiated approaches, real thought put into the use of technology, delivered through tactics that aren’t intrusive in an obvious way.
  4. Delivery on your promises…and then some! You earn the right to receive my loyalty and maybe, just maybe, I’ll stick around.

 Charles de Gruchy remembers how it was

Build customer relationships before it’s too late! DM News October 23, 1994

Why is it that some companies have to be attacked by stiff competition before they start paying attention to their customers? Nowhere is this more evident than in Bell’s current frenzy to introduce a myriad of offers, services and options. It leads me to wonder how we were ever able to live without all these wonderful things, once upon a time, when the choices for voice communication were between Ma Bell or two tin cans and a piece of string. Why didn’t Bell care so much about our business then? Need I ask? They say, a little competition is healthy for everyone. At that rate, Bell must be getting healthier every day! I’ve never had so much attention from them. Just the other day I got a wonderfully warm and friendly letter that went like this:

“Dear Customer”: (even though the address was personalized), “My name is Sandy Davis. I’m a manager with Bell Customer Service Centre and I’m writing to you for several reasons. The first is to thank you for using Bell Call Answer Services…I want you to know that you’re important to us and we really appreciate your business”. So, Sandy, it’s nice to be appreciated. What took so long?

There was more.

“Secondly, we’d like you to think of us as a resource, as well as a supplier. At the Bell Customer Service Center, we want to respond to the needs of our customers. In order to help you better, we’d like to make our relationship more interactive. I think you’ll agree that we’ve found an interesting way to make this happen”. Now, it is nice to be appreciated but, Sandy and I, we’d only just met and this seemed like rushing things a bit , although, I must say, by this time I was beginning to wonder. Is this Sandy a man, maybe? Tall? Good looking?

The letter went on, “My problem right now is that I don’t know how to help you specifically. We haven’t had the chance to talk”. Why not? Sandy, dear, you have my number! ”

My hopes were soon dashed. (Besides, I’m happily married. )

Sandy continued, “I don’t know as much about your business as I’d like to. I certainly don’t want to just send you a shopping list of all our services…but I do want to see if there’s some meaningful way I can augment your business…That is why we’ve created a brief response form designed to help us learn more about your needs and preferences”. After more friendly phrases about  sharing experiences and viewpoints and thanking me repeatedly, Sandy signed off with “I’m looking forward to receiving your response and to the opportunity of getting to know you better.” Did this mean Sandy was suggesting, dare I say it, forming a customer relationship?

Enclosed was a one-page survey form

The first question asked me to rank the relative importance to my business of areas such as generating new business, building customer relationships, providing quality service, controlling costs and managing time. I guess Bell must have the luxury of choosing among these issues and, besides, how will the fact that all of the above are extremely important to me help them get to know me and my business better? The survey went on to ask such as things as whether I viewed the role of telecommunications in my business as operational, strategic or both, what my business growth outlook is over the next 18 months, how many calls I receive in a day and how often someone is available to take calls and, oh yes, how satisfied I am with my relationship with Bell. Interestingly, the only choices given for answering the latter were Somewhat, Moderately or Extremely–behind that one the operative philosophy must be that no bad news is good news.

Not one question asked me directly anything about my business telephone needs. And, here that rascal Sandy led me to believe that, at last, somebody really wanted to know what I, as a customer, wanted. Oh well, maybe next time.

Or maybe there won’t be a next time. No matter what the sector, the message from today’s competitive environment is simple. If you’re not making friends with your customers before somebody else comes along and does it, you’re probably too late. And, if you really want to know what your customers really think, don’t be afraid to ask them questions the answers to which you may not like, but, you’ll know the truth! Why wait till your customers vote with their chequebooks?

 Charles de Gruchy remembers how it was

Loyalty — I’ll be back! Strategy Magazine December 13, 2007

Everywhere you look it seems someone is talking about building customer loyalty and using database marketing. What I don’t see is very many people doing anything meaningful about it from a consumer point of view.

Recently, I experienced an example that gave me new hope.

But, first, scene one…the flip side.

I have been a faithful customer of the same hair salon for at least a decade. But, I’ve been faithful in physical form only because, in one way or another, I’ve left after almost every visit feeling irritated. It always took several hours. Everybody moved at a snail’s pace. The place was rampant with prima donnas. Not to mention that they had the worst and oldest selection of magazines with which to kill the inordinate waiting times! And, it seemed as though just about anything was more important than serving customers…talking to friends who happened by, taking the dog for a walk, finishing lunch, going outside for a cigarette…believe it or not, I’m not exaggerating, these things actually happened. Complaining had no effect.

And, in all that time, not once did I receive anything in the mail, not once did I receive any special treatment, not once did anybody ask whether the service was satisfactory.

So, why did I keep going back for so long? Habit…inertia…procrastination…masochism…who knows?  But, aren’t those all wonderfully positive loyalty-building attributes?

So guess what finally happened? I switched to another salon.

Scene two: first visit to the new salon. I was asked to fill in a form with my name and address which were entered into the computerized appointment system. I was told how long I might be waiting. The stylist brought me a choice of beverage and a selection of recent magazines to look at while he worked on my hair. Every hour an attendant came around selling snacks for those (like me) who might have missed lunch to fit in a hair appointment. But, all that is not the best part. My appointment was on a Thursday afternoon. The following Tuesday I received a mailing from the salon. All black and white. Good quality paper but nothing fancy. The note inside was dated the preceding Friday: Dear Mr. de Gruchy: I would like to thank you for visiting our salon recently. I trust that your service and experience was a pleasant one. We welcome any comments, positive or negative and hope to see you again in the near future. I am enclosing a scale of charges for you indicating the range of services and prices we offer. Also, if you present the enclosed business card on your next visit, you will receive a free bottle of MK shampoo. “The note was hand-signed by the owner. It was enough to make me think they valued my business and really wanted me to come back again! And, guess what? I will.

I use this simple example to illustrate that building customer loyalty and using a database in a marketing mode requires neither rocket science nor alchemy.

Let’s look at the elements:

  1. Timeliness: My experience at the salon was still fresh in my mind and within less than week I was reminded of it and pleasantly surprised by the speed of the communication.
  2. Acknowledgement and appreciation of the customer’s business: Thank you is such a simple thing.
  3. Request for feedback: Remember, the average business never hears from 96% of its unhappy customers and the average customer who has a complaint will tell 9 or 10 people about it. 13% of them will tell more than 20 people! On the other hand, 95% will return if they feel the complaint is resolved quickly and they’ll tell an average of 5 people about that. And, asking your customers for feed back doesn’t mean you formulate a self-serving questionnaire that only gives you the news you want to hear. Recently, I examined the feedback survey used by a major hotel chain. My conclusion was that they didn’t want to know what I really thought otherwise they would have asked different questions. Be careful your questionnaires and surveys don’t just tell you what you’re prepared to hear.
  4. Invitation to re-purchase: Turning a one-time buyer into a two-time buyer is a direct marketing adage is as old as the hills and twice as enduring. Not to mention that the only way to finance the cost of constantly acquiring new customers is by having sufficient profitable repeat customers.
  5. Suggest additional products and services: Every communication with a customer is a selling opportunity. There are those who may have trouble with the notion of constantly selling customers, but keep in mind that today’s consumers are looking for information and, in the case of my salon story, they were simply letting me know something that I wouldn’t have known otherwise. The result is that I am now a better informed customer.
  6. Incentive for re-purchase: Keep it simple. Make it relevant. Give it value. A bottle of shampoo for a salon visit. Bingo.
  7. Accountability: Here’s one that many forget. Untold dollars are spent writing glowing customer service letters which are then signed by a non-existent, made-up person. The president or owner doesn’t have to answer all customer correspondence personally but it sure leaves a warm fuzzy feeling when he/she cares enough to personally endorse the outgoing message to the customer.

 Charles de Gruchy remembers how it was

“intelligence”, “intimacy” and “integrity”. Strategy Magazine, June 19, 1995

On the flyleaf of The Great Marketing Turnaround Doctor Samuel Johnson is quoted from 1759, as saying, “The trade of advertising is now so near perfection that it is not easy to propose any improvement.”

Now, I don’t know really what advertising was like in 1759, but I do think it has probably been perfected somewhat in the 236 intervening years and, further, I do honestly believe–Sam–you ain’t seen nuthin’ yet!

But, as Canadian direct marketers we face more issues, stiffer challenges and tougher competition than ever before and from all directions of the globe. Are we up to it? Are we going to be able to handle it?

A few years ago, I chose three words which, for me, seemed to characterize the future of, not only advertising, but marketing and, most particularly, its blood relation direct marketing.

Those words are “intelligence”, “intimacy” and “integrity”.

As marketers–intelligence –about our markets, our competitors, our customers, –is now, more than ever, our life blood. But, the biggest risk is death by overdose of data.

Intelligence makes it possible to find true prospects and turn them into loyal customers without creating waste; to drive advertising by end user behaviour and attitudes instead of the latest trend in creative brainstorms; to benchmark our companies against our competitors and see how we measure up.

But, how are we going to sift through the almost overwhelming amount and speed and changeable load of stuff that comes at us every day and get at only the sparkling gems?

It’s simple—If you can’t act on it, use it in dollars and cents decisions or use it to make some positive things happen…it’s not intelligent information, it’s clutter. And, you’ll drive yourself crazy if you try to treat it all otherwise.

The word, intimacy, has several connotations, one of which can remain where it belongs in the bedrooms of the nation.

In another, more public, sense intimacy implies friendship–familiar personal friendship.  The competitive scramble is on to forge the bonds of customer relationship like never before. It’s a concept that goes far beyond the buzz words of quality management and customer service.

The technology is here and now in every form imaginable ready to make possible the “high touch” of total emphasis on the customer.

It’s up to us to put it to work with the objective being to get to know our customers and potential customers–intimately, individually–and, to truly communicate with them in the same way–as human beings!

My third word is integrity. It’s become, perhaps, a little old-fashioned with it’s implications of ethics and high standards. But, look around, at companies who are really applying the golden rule to their customer service, continuing to take the proactive High road on environmental issues and sharing their wealth with the underprivileged. Many of them are succeeding, even in these hard times.

Another connotation of integrity is that of totality or unity. Integration only coordinates. Integrity as a unified approach to strategic planning is comprehensive. It’s deep, not wide. It’s authentic and considered, not superficial. Integrity has as its driver the true understanding of customer wants and needs. It builds personal relationships in an increasingly fragmented world.

Need proof? Just go for a “surf on the net” as “they” say. It’s all happening–intelligence in the meeting of minds, instantly, intimacy (in all its connotations) and the integrity of many channels of sale, industry sectors and individuals from every walk of life all sharing, buying, chatting, selling and having, we hope, a wonderful time. Hey, Doctor Johnson–are you spinning in your grave, yet?

 Charles de Gruchy remembers how it was

Keep them coming back. Strategy Magazine December 13, 2007

Everywhere I go it seems someone is talking about building customer loyalty and using database marketing. What I don’t see is very many people doing anything meaningful about it, from a consumer point of view.

Recently, I experienced an example that gave me new hope.

But first, Scene One:

I have been a faithful customer of the same hair salon for at least a decade. But, I’ve been faithful in physical form only because, in one way or another, I’ve left after almost every visit feeling irritated. It always took several hours. Everybody moved at a snail’s pace.  And, it seemed as though just about anything was more important than serving customers…talking to friends who happened by, taking the dog for a walk, finishing lunch, going outside for a cigarette…these things actually happened! Complaining had no effect.

And, in all that time, not once did I receive anything in the mail, not once did I receive any special treatment, not once did anybody ask whether the service was satisfactory.

So, why did I keep going back for so long? Habit…inertia…procrastination…masochism…who knows?  Aren’t those all wonderfully positive loyalty-building attributes?

So guess what finally happened? I switched to another salon.

Scene Two: First visit to the new salon. I was asked to fill in a form with my name and address which were entered into their computerized appointment system. I was told how long each stage of my procedure would take. The stylist brought me coffee and a selection of recent magazines to look at while he worked on my hair. Every hour an attendant came around selling snacks for those (like me) who might have missed lunch to fit in a hair appointment. But, all that is not the best part. My appointment was on a Thursday afternoon. The following Tuesday I received a mailing from the salon. All black and white. Good quality paper but nothing fancy. The note inside was dated the preceding Friday: “Dear Mr. de Gruchy: I would like to thank you for visiting our salon recently. I trust that your service and experience was a pleasant once. We welcome any comments, positive or negative and hope to see you again in the near future. I am enclosing a scale of charges for you indicating the range of services and prices we offer. Also, if you present the enclosed business card on your next visit, you will receive a free bottle of MK shampoo”. The note was hand-signed by the owner. It was enough to make me think they valued my business and really wanted me to come back again! And, guess what? I will.

I use this simple example to illustrate that building customer loyalty and using a database in a marketing mode requires neither rocket science nor alchemy.

Let’s look at the elements:

  1. Timeliness: My experience at the salon was still fresh in my mind and within less than a week I was reminded of it and pleasantly surprised by the speed of the communication.
  2. Acknowledgment and appreciation of the customer’s business: Thank you is such a simple thing.
  3. Request for feedback: Remember, the average business never hears from 96% of its unhappy customers and the average customer who has a complaint will tell 9 or 10 people about it. On the other hand, 95% will return if they feel the complaint is resolved quickly. And, asking customers for feedback doesn’t mean you formulate a self-serving questionnaire that only gives you the news you want to hear. Recently, I examined the survey used by a major hotel chain. My conclusion was that they didn’t want to know what I really thought otherwise they would have asked different questions. Be careful your questionnaires and surveys don’t just tell you only what you’re prepared to hear.
  4. Invitation to re-purchase: The objective of turning a one-time buyer into a two-time buyer is a direct marketing adage as old as the hills and twice as enduring. Not to mention that the only way to finance the cost of constantly acquiring new customers is by having sufficient profitable repeat customers.
  5. Suggest additional products and services: Every communication with a customer is a selling opportunity. There are those who may have trouble with the notion of constantly selling customers, but keep in mind that today’s consumers are looking for information and, in the case of my salon story, they were simply letting me know something I wouldn’t have known otherwise. The result is that I am now a better informed customer.
  6. Incentive for re-purchase: Keep it simple. Make it relevant. Give it value. A bottle of shampoo for a salon visit. Bingo.
  7. Accountability: Here’s one that many forget. Untold dollars are spent writing glowing letters to customers which are then signed by a non-existent, made-up person. The president or owner doesn’t have to answer all customer correspondence personally but it sure leaves a warm fuzzy feeling when he/she cares enough to use their own name in messages to customers.

Conclusion: I can’t wait to find out what happens after my second visit!

 Charles de Gruchy remembers how it was

Deadbeats Need Not Apply 07/18/95

In the halcyon days of the eighties a white-tablecloths-and-snooty waiters restaurant such as Zachary’s at the Bristol Place Hotel on Toronto’s airport strip had line-ups for lunch and dinner. Those days are gone and desperate times call for different methods as I discovered the last time I dined there in late summer of last year. Reposing between the salt and pepper was an invitation to join Zachary’s Restaurant Club. The form stated, “If you dine at Zachary’s no less than two times each month…we invite you to enjoy the privileges of membership.” Spaces were left for home and business addresses and phone numbers. A list of benefits included complimentary valet parking, preferred tables, complimentary cakes for special occasions, special room rates in the hotel and a $15 gift certificate for spending $300 or more accumulatively. Who could resist? To their credit, however, the bale-out-of-it-doesn’t-work clause was in the fine print: “Effective to December 31, 1994.” so they wouldn’t be giving away free cakes to members forever.

In late October I received the first mailing consisting of “Food and Beverage Happenings” newsletter, a letter personalized to Charles de Gruchy thanking me for registering, my membership number and a valet parking pass to hang on my car’s rear view mirror next time I drove up to the hotel door. The doorman would “take care of the rest.” The letter hand-signed by the hotel manager and restaurant maitre d’, and the hand-written membership number on the parking tag  added just the right personal touch.

In November the second mailing arrived with the same newsletter as before, a buck-slip promoting Zachary’s Sunday Brunch and a flyer promoting a romantic overnight package combining deluxe accommodations for two and a three course dinner at Zachary’s. Absolutely no mention whatsoever of the Club or it’s benefits!

I can only think the program must have shown some results of some kind because in early February of ’95 the third mailing arrived with a new newsletter, another letter from the manager and maitre d’, this time with neither personalization or hand signatures. The enclosed certificate for $5.00 redeemable in food, beverage and services at the Hotel did, however sport an illegible hand signature (no expiry date on the certificate) And, the letter did reiterate the benefits of membership.

Package number four, in May, enclosed another newsletter with a 10% discount on group business accommodations over $1,000, no letter and a promotional flyer to visit Zachary’s in May and be automatically included in a weekly draw for a one-night room and dinner package (No breakfast. Go back home for that, I guess!)

At the end of June, number five arrived with a buck-slip promoting Sunday brunch in July and a brochure promoting The Business Select Programmme.

The enclosed letter (not personalized, not hand signed) boosted the reward for a $300 spend from $15.00 to $30.00 for the month of July. It’s going to be tricky though because the letter explains that the dining room will be closed for lunch and dinner every Saturday, Monday and Friday in July. If I get my scheduling right, maybe I’ll make it back to Zachary’s this summer. That’s right. I haven’t been back since last year…five first class mailings later! That’s over two dollars in postage alone!

What’s the point of dragging you through all this? Simply to illustrate these few pointers about Club programs:

  1. Qualify your members up front. Don’t waste time and money on tire kickers. Zachary’s program should have only been offered to customers who booked a second reservation in a short time period. And, find out something more about them before you start communicating. Include a mini survey on the membership form.
  2. Don’t start out with a five star mailing package and down-grade the quality. Figure out the real cost projected over several years up front. Then design the packages you can afford.
  3. If you’re going to invest in a newsletter, resist the urge to cram it full of product promotion. In Zachary’s case the Happenings newsletter is cover-to-cover restaurant and hotel promotion. What a missed opportunity to include tips for travelers, table manners, wine guidance, etc.
  4. If you want your customers to come back for more make sure you can track whether they ever showed up in the first place! And, when they don’t show up, let them know you’ve noticed. Zachary’s should have blown the whistle on me by mailing number two. Maybe I’ll turn the tables and let them know I’m a deadbeat!

Charles de Gruchy remembers the way it was

What price loyalty? Strategy Magazine July 16, 1995

While marketers can always come up with a brilliant rationale for their strategies, I was particularly intrigued by the following quote from a Globe and Mail article on Zellers’ Club Z loyalty program

“While Zellers hasn’t put a number on how much Club Z has boosted sales, they know that a great deal of business would be lost if the program was discontinued”.

So, let me get this straight. They don’t know whether the program is delivering additional business but they do know that if Zeddy the bear (the ClubZ mascot) went into permanent hibernation tomorrow sales would decline dramatically.

Call me simplistic, but I still have trouble understanding how my loyalty is supposed to be inspired by giving away (in one form or another) a percentage of the sale every time I make a purchase or, in another example, a free book every time I buy 10 books no matter who I am or how much I buy.

Maybe I’m just not a typical consumer. Or a typical marketer. It seems the objective of most loyalty programs is still simply to drive traffic, build market share or move inventory rather than delivering profit to the bottom line by changing (for the better) pre-existing customer behaviour.

Since I travel fairly often to Ottawa, a year or so ago I joined the Westin Hotels Premiere Club by filling out an application left in my room. Many weeks later I received a splendiferous oversize Cadillac quality mailing package complete with plastic membership card and an extensive questionnaire asking me to select a variety of preferences such as what type of pillow I prefer. Pillows in hotel rooms happen to be an issue with me as I’m highly allergic to feathers. Now, I don’t know about you but when I’m away on business and crawl, exhausted, into my hotel room at the end of the day, the top thing on my mind isn’t whether the pillows are feather or not. But, inevitably, the subject comes up. Usually about the time I start sneezing. After that, unless in a hotel thoughtful enough to leave a synthetic pillow somewhere in the room, it’s a matter of calling housekeeping and waiting for twenty or thirty minutes until someone shows up. I have a few stories about that experience, too!

In any event, I was most impressed by the Westin wanting to know what kind of pillows I like and entertained visions of walking into my room next time and finding that the pillows had already been changed in anticipation of the visit of me, a repeat customer. Not so. In fact, since receiving that beautiful package, absolutely nothing whatsoever has happened. No communication, no recognition. No benefits. No delivery on my stated preferences. Nada!

Would it cost the Westin hotel any more to pre-select my room prior to check-in and have synthetic pillows waiting versus having to bring them later anyway at my request? And, think what I’d be saying right now if they did! I can only conclude that the purpose of the questionnaire was nothing more than glorified market research. Not to mention, membership in the Premier Club is available to anyone able to fill out the application…from small children to once-in-a-lifetime travelers. I wonder how clean their membership database is!

How about some genuine benefits in belonging, collecting, repeat buying, card carrying or whatever? Delivery on promises, even implied ones and impeccable delivery at that has to be the minimum performance level to maintain customer loyalty. Why? Because meeting consumer expectations (especially if you’ve raised those expectations in your communications and promotions) is merely the price of entry in the market today. Now, where are your unique points of difference going to come from?

Once upon a time, about 1981 to be exact, American Airlines launched the AAdvantage program , the granddaddy of frequent flier programs, as a temporary promotion to identify frequent travelers and keep them brand loyal.  According to Inside FlyerI magazine, airlines in North America have now accumulated more than a trillion award miles in liabilities, equivalent to about 50 million free domestic flights. In fact, award miles have grown more quickly than overall traffic thanks, largely, to the many “partnering” programs with hotels, rental car companies, phone services, cruise ships and credit cards. That means it’s possible to accumulate all the “rewards” of using the brand without ever having purchased one single solitary product! What’s wrong with this picture?!
A recent article in Direct magazine stated “financial benefits for these programs are pretty much intangible. To ask airlines what these promotions have meant to their bottom line is to be met with silence, or remarks along the lines of ,”We don’t track it, but we know it’s successful.”” Huh? There’s a lesson to be learned from frequent flyer programs and too few have paid attention.

It’s called long-range planning. Too often programs are launched with great hoopla and fanfare, loaded up with all the possible benefits, tangible and otherwise! But there’s nothing left for an encore to keep the program alive in subsequent months and years., let alone a plan for true reckoning of the ongoing return on investment, if any.

Admirably, the intent of many loyalty programs is to target best, most loyal customers and reward that loyalty. In practice, over and over again, I see reward programs broadcast holus bolus to the masses with warm and breathing being the extent of membership criteria. And the results? Everyone warm and breathing is eligible to take advantage of the rewards without having to do anything whatsoever to deserve special treatment. Net, net the more things change the more they stay the same.!

Leonard Lee  founder of Lee Valley Tools, a cataloguer of woodworking and gardening products has a simple philosophy based on treating people fairly and honestly. For example, when Lee was first starting his company he had some difficulty keeping inventory in stock on a particular item. He responded to the situation by writing customers a cheque for the interest they would have earned on the money tied up waiting for the back order to be delivered. And now, seventeen years later, customers still talk about how impressed they were by that small gesture. Those cheques probably amounted to only a few dollars. But, think of their loyalty value!

In the end, I believe, building genuine loyalty is not about giving away what you’ve already got. It’s more about keeping what you don’t have yet!

Charles de Gruchy remembers the way it was