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.