Anyone who has spent more than a few hours around me knows I have two nutritional weaknesses: Chick-fil-a and fountain Dr. Pepper. Today as I was refilling my 32 oz. Styrofoam cup at my favorite mom and pop gas station, the cashier asked me if I had my loyalty punch card. I had completely forgotten about the cheaply printed 80# Cardstock in my wallet, hidden behind a sundry of other cards. I've had the card for years, and yet today marked only my sixth punch towards my free refill. I've probably dropped half a paycheck over the last few years at that place on fountain drinks, and yet to my surprise my loyalty card was barely half full.
Another of my favorite fast food establishments, Chick-fil-a, has almost a covert loyalty program many people do not even know about. I remember one lunch hour after dropping almost $8 on a combo meal, the server asked me if I had a loyalty card. I'd never heard of these so called loyalty cards. She reached under the counter punched a card and handed it over. Buy four get one FREE! I've found this offer varies depending on the franchise, but when I found out I only needed to buy four sandwiches to get one free, I was hooked. Recently, I've almost become addicted to playing what I call the "Chick-fil-a lottery"; I wait with anxious anticipation to check to see if I'm lucky enough to get a customer survey printed on the bottom of my receipt. Completing the survey qualifies you for another free sandwich. It occurred to me the other day that Chick-fil-a probably cares very little about my opinion since it rarely changes each time I take the survey. But I know they don't mind the idea of me coming back again and again for the chance to maybe "win" another survey coupon. Even if I don't win the "survey lottery," with the punchcard I'm only three sandwiches or less away from another freebie.
What do these two examples have in common? They demonstrate what's good and bad in loyalty marketing. A few weeks ago, an article was released by Direct Marketing News stating that major consumer brands are ramping up loyalty programs as the economic recovery and impact of marketing efforts remains sluggish overall. Loyalty programs are an interesting endeavor for businesses big and small, and compared with other more traditional marketing and advertising programs, they can be very economical to start. And yet, whether you're a national chain like Chick-fil-a or a mom and pop gas station, there are some key consumer expectations that should not go unconsidered when launching a loyalty program.
Below are three key considerations from a loyalty program devotee:
1. Loyalty programs require advocates.
In both my real-life examples, I wouldn't have 1) known about the program or 2) received my loyalty credits if someone on the frontlines hadn't engaged in loyalty dialogue with me. It's true loyalty programs can be cost-effective compared to traditional advertising, but often I see retailers also cutting back on both the external and internal training and communication that really stimulates the use and adoption of the programs. Major brands should consider the communication and training surrounding loyalty programs just as they would launching any major brand advocacy program. Failing to do so will undoubtedly lead to lower adoption rates, poor communication of program expectations by employees and misconceptions about the program on behalf of the consumer. MarketStar engages in brand advocacy support and training for hundreds of brands nationwide and our methodology and engagement can be customized to advocate and support loyalty programs.
2. Keep it simple.
We deal with the complexities of airline loyalty programs because the reward is in some way relative to the amount of pain we have to go through to receive the free flight. Most loyalty programs, however, won't survive if they require too much work on the part of the consumer, whether that be in grasping the rules or in knowing how and when points can be redeemed. A local Mexican restaurant was famous for their loyalty punch cards. It definitely kept me motivated to return knowing a free meal was only a few more visits away. A few years ago they changed from a simple stamp on a business card to a fancy plastic credit card that tracked your points through their POP system. I'm sure automating the program through the POP system saved the restaurant a lot of money in fraudulent redemption, but it also cost the program its simplicity and visibility. I no longer could look in my wallet and see how many points I had and how close I was to a free meal. I just had a fancy card with a logo on it. Needless to say, I don't feel smart enough to eat there anymore.
3. Make it worth participating in.
Successful loyalty programs need to be worth the effort. I buy my Dr. Pepper from the same mom and pop gas station despite their loyalty program. It really has no bearing on my feelings and passion for the product I am buying and the convenience of their location. With Chick-fil-a on the other hand, the idea of a free sandwich after the purchase of just four is very enticing to me. It feels obtainable and worth choosing their brand over the hundreds of other fast-food options in our area. Combine that with the "survey lottery," and I feel like I am receiving something free on almost every third visit. That concept, perceived or not, has tremendous sway on where I spend my lunch money.
