Two big announcements in the loyalty business illustrate the contrast between the old and the new. Around the same time American Express announced the closing of its multi-retailer Plenti program, Marriott announced the post-merger consolidation of its multi-brand loyalty program to the general satisfaction of all. What’s the difference? It’s the experience, stupid.
As articulated by Dr. Gary Rhoads in ESM, transactional incentives drive short-term behaviors but amount to a zero-sum drive to the bottom without making the emotional connection that underlies sustainable loyalty. Despite excellent point-of-sale marketing at gas stations and other retail outlets, Plenti became just another transactional coupon program in a highly cluttered world. Plenti could not build the emotional bond that makes people loyal to their favorite brands.
In contrast, and in part due to the nature of its business, Marriott’s loyalty program is more than transactional; loyal customers experience a higher level of service at almost every touch point that goes beyond complimentary hotel rooms or other offers. That includes the level of personal experience they often receive on site or on the phone. Most people end up laying out plenty of cash alongside the freebies they receive to round out the experience. A properly designed loyalty program supports the overall brand vision and culture by recognizing committed customers in a way that affects the heart as much as the wallet, especially when combined with the special attention of engaged employees.
The loyalty market has begun the inevitable shift to a more science-based approach that is happening in the rewards and recognition space. As with almost every other area involving engagement, a subject not taught in business schools, planners have often relied on ad hoc quick fixes, when the solution lies in a systematic approach that connects all the dots of engagement as outlined in ISO Annex SL and 10018 Quality People Management standards.
The fundamental question to ask before designing any loyalty program in any industry is: How can your organization create an emotional connection with the people committed to your products and services beyond pricing? Points and rewards are just one part of the equation.
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