Today we heard official news that we already knew: We are in a recession. So what are you going to do?
My newsletter today, It’s Time to Invest, encourages us to invest in our most valuable asset, the loyalty our customers have for us. There are many things that we should cut back on, but our customer relationships and the loyalty that comes from those relationships are worthy of more attention - and investment - than ever.
In my video post yesterday I talked some more (…. ok, I’m a bit obsessed with this topic) about the difference between transactional loyalty and True Loyalty. Transactional loyalty is based on promotions and programs, (and the customer is only loyalty to the promotion or program) and True Loyalty is based on solid relationships (where the customer actually becomes loyal to your business and to her relationship with you).
This morning I went to get my car washed at Grand Prix Car Wash near my house. As I got out of my car the guy with the vacuum handed me a ticket to take to the cash register. I noticed that “You have 17 towards your 10th car wash free” was written on the bottom. I never noticed, but they type my license plate number in each time I enter the car wash and have been tracking my visits.
I asked the cashier to explain. He gave me a form to fill out and said that my next car wash (the 18th) would be my 10th car wash free.
Do I even need to mention the easy ways Grand Prix Car Wash could turn this program from transactional loyalty to True Loyalty? Ok, here are a few simple ideas …
Tell employees that the business (and their work) depend on loyal customers who return many times. Help them see that the loyalty program will help them have more secure jobs … and better tips. Bring them in on the story!
Keep track of progress for the customer. Have the guy with the vacuum tell the customer, “Hey! This car wash is going to be free! Thanks for coming here so many times!” If he misses it, the cashier can tell the customer.
Give the free car wash on the actual visit where the customer “notices” he’s earned it, not on the next visit.
Use the form only if a family wants to group multiple cars under one account.
Think about loyalty as a human concept, not as a promotional concept.
On a related front, check out the thoughtful comment from Shane of Home Made Pizza Company on this post I wrote about their slip into “Get your 10th free” transactional loyalty.
It’s true. Everyone wants a piece of your customers. And, in this economy, expect the promotions, offers and deals to explode.
In this Drivercam riff, I focus on how customer loyalty - True Loyalty - is probably the most valuable asset you have. But don’t mistake loyalty to the deal for loyalty to you.
Enjoy the video … it’s only two minutes. (Yes, the traffic was rotten.)
True Loyalty isn’t created because one business offers customers a better deal than their competitors offer. True Loyalty happens when a customer has deep, meaningful, unquestioned beliefs about a company they buy from or a product they buy.
Today’s newsletter, I believe I am loyal to you, focuses on the connection between belief and loyalty. I’d love your comments, below. Do you agree with me?
Caroline and I have been talking a lot lately about the differences between True Loyalty and transactional loyalty … she had an experience the other day that showcases this difference.
Caroline and her sister/roommate Emily started ordering pizzas from Home Made Pizza Company a few years ago. (Home Made Pizza Company prepares fresh, uncooked pizzas that you can pick up at their store to cook at home.)
Here’s the short version of what happened when Caroline went to pick her recent pizza order: When she arrived and gave her name, she also presented her completed punch card that showed this, her 10th, pizza should be free. When she got her pizza she saw it was made with the wrong ingredients. The employees working in the store were not very helpful about re-doing the order, and it took about 40 minutes for the new pizza to be made, without much communication during that time about the status of her order. At the end of the ordeal they started to ring her up on the cash register, and she reminded them about the 10th pizza free. “Oh yeah,” was the response and they gave her the pizza for free.
If Home Made Pizza Company wants to create loyalty, they can’t delegate that loyalty building to a program. Loyalty is not created by programs. It is created by humans. You can give away the 2nd pizza free, but if your company is not good at basic human interaction with customers, you will not create loyalty. On the other hand, businesses with the best loyalty don’t build it with programs, they build it with relationships.
I don’t know much about Home Made Pizza Company, but I can see from their website that they have 21 stores and a few more on the way. At that size, they probably have a corporate office, where the 10th pizza free promotion was created. True Loyalty is not created in corporate offices. It is created in one-on-one interactions with customers. Transactional loyalty is like caffeine; it will give you a short burst of energy, but you’ll pay for it later. Keep the program, if you want, but not at the expense of creating True Loyalty.
"When Steve Yastrow writes, I pay close attention" - Tom Peters
Steve is the author of Brand Harmony and the newly published We:
The Ideal Customer Relationship. Learn more and order direct from our Products
page, or from Amazon.
Subscribe for a Free Ebook! Encounters: The Building Blocks of We Relationships
About Steve Yastrow and Yastrow & Company
In addition to writing, I spend most of my work time helping companies unleash their potential by creating better connections with their customers. This happens through my speaking events and through Yastrow & Company consulting engagements, where my team and I help companies figure out who they intend to be in the future, and then engage the entire company in creating that future through strong "We" customer relationships.
Before starting Yastrow & Company in the mid-90s I was vice-president of resort marketing for Hyatt Hotels. My experiences in the hotel business showed me clearly that most marketing doesn’t happen in the marketing department. Customers are paying attention to all interactions with a company, not just the promises made in traditional "marketing communications."
![[Post to Twitter]](http://yastrow.com/wp-content/plugins/tweet-this/tweet-this-small.png)
Tweet This
Subscribe for a Free Ebook!