Monday 28 May 2012

Keeping your loyalty star rising

Starsinthesky"If the stars should appear but one night every thousand years how man would marvel and stare" - Emerson

This is an interesting observation from the eminent US poet, lecturer and essayist Ralph Waldo Emerson and was written back in 1836 in his essay Nature.

It is though still as relevant an observation nearly 200 years later.

When we first see something it gets more pleasing and likeable the more we see it.  Known as the familiarity principle, it is something advertisers leverage when they constantly expose us to their advertisements across ever increasing channels.

These adverts leverage the mere-expore effect that essentially states that repeated exposure to something increases perceptual fluency which is the ease with which each subsequent stimulus can be processed.  This then follows with the branded goods we go on to purchase and is the reason we simply pickup the same brand repeatedly - perceptual fluency makes it easy -  we don't have to think about it.

However, this only works to a point. In the research paper "What's in a name? Reputation Building and Corporate Strategy", they showed that "the higher a firms visibility per unit of sales [...], the worse it's reputation. ", even when the exposure is mostly positive.

As the saying goes, familiarity really does tend to breed contempt.


This is obviously interesting (and has implications) for above the line marketing, but how does it impact below the line marketing?
  • If every one is doing daily deals, does anyone really care anymore?
  • If every store has a sale, are we excited anymore?
  • If every day we receive another offer, do we read them anymore?
  • If every activity has points attached, do we collect them anymore?
Groupon was is a great example.  It was new, engaging and different and it took customers, merchants and the market by storm.

Google offered to buy them for $6bn and recent "valuations" suggested $30bn.  But then competitors jumped in - lots - including retail behemoth Amazon.  With reports suggesting though that Amazon is only selling a handful of deals, 80% of subscribers to deal sites never buy a deal and merchants running away in droves, this would appear to be a sector who's star has already peaked.

Over exposure of both the offers and the approach has meant customers are starting to tune out.


In a similar way with loyalty, if every activity is "sprinkled" with points, there is a danger of points fatigue and ultimately ambivalence towards the points.  Using points on all activities, especially those not related to any monetary exchange can devalue the points and make them appear worthless.

Brent Houlden, leader of Deloitte's Retail Practice in Canada highlights this when he says:-
"...Point collecting is losing its lustre... Loyalty programs tend to go stale over time. If you want to continue engaging customers, you need to continuously reinvent your program"
In a recent McKinsey iConsumer survey where consumers were asked why they had posted online comments / reviews - something loyalty programmes are keen to encourage - only 6% said it was to gain points.  On the other hand, almost 40% did it because they liked it or liked helping others.

This is something a well designed loyalty programme can also foster and encourage.  In a blog entitled "Loyalty: More than Just Points" it discussed how Starwood Hotels’ emphasis on guest service interactions are the key to producing loyalty saying:-
"It is telling that Starwood, so tightly branded by its loyalty points program, places such emphasis on service interactions as the first component of guest loyalty.  And it is that passionate loyalty, Starwood’s “Loyalty Beyond Reason” that inspires guests to share their experiences, recommend properties to their friends, and rebook."
This is not to say points programmes in themselves have a problem, it's just that in a competitive market where almost every retailer, branded product or hotel chain has a loyalty programme  customers will simply become ambivalent to them.  The programmes and their mechanics have become familiar and the danger is that this ultimately leads to contempt and thus consumers tuning out.

In order to attract, engage and retain customers you need to do more to make programmes standout and continue to stand out so as to make people "marvel and stare".

3 comments:

Unknown said...

coach outlet online
giuseppe zanotti shoes
true religion jeans
ray-ban sunglasses
ferragamo shoes sale
michael kors outlet
lululemon outlet
ugg uk,ugg outlet,ugg boots outlet
tiffany outlet
rolex watches
coach outlet
ferragamo shoes
oakley sunglasses wholesale
lebron shoes
polo ralph lauren
louis vuitton outlet
fitflops sale clearance
toms shoes
swarovski crystal
tory burch outlet
michael kors outlet
fitflops clearance
ferragamo shoes
ray ban sunglasses
michael kors outlet online
beats headphones
michael kors outlet
kobe 9 elite
michael kors outlet store
longchamp handbags
michael kors uk
michael kors canada
cheap uggs
longchamp outlet
0727JIANXIANG

Unknown said...

longchamp pliage
hermes bags
ugg outlet store
ray ban sunglasses
michael kors handbags
toms shoes
cheap ugg boots
coach outlet
louis vuitton outlet store
adidas uk store
ray ban sunglasses
uggs on sale
nike outlet store
puma shoes
valentino shoes
ed hardy tshirts
cheap ugg boots
michael kors online
ralph lauren outlet
michael kors handbags
michael kors wallet
coach outlet
cheap nike shoes sale
christian louboutin uk
oakley sunglasses
chicago blackhawks
tory burch outlet
longchamp handbags
asics,asics israel,asics shoes,asics running shoes,asics israel,asics gel,asics running,asics gel nimbus,asics gel kayano
toms outlet
ray ban sunglasses
nike roshe run
louis vuitton pas cher
polo ralph lauren
snapbacks wholesale
0727jianxiang

chenlina said...

cheap nfl jerseys
cheap uggs
michael kors bags
los angeles clippers jerseys
mont blanc pens for sale
ralph lauren clearance
designer handbags
longchamp outlet
uggs for cheap
ugg boots sale
chenlina20161021