Can't buy me love.

I've been thinking about loyalty and loyalty programs of late due to some conversations I've been having.

David Armano called this a "must watch video for marketers" and he was right.  It's a presentation by Brandon Schauer and David Verba from Adaptive Path about their new book titled "Subject to Change:".  The video is long:  An hour, basically.

I don't expect many of us to find the time to watch it.  So let me break down some of my takeaways from the last twenty minutes that were specifically addressed to loyalty programs.

• Over 75% of all customers have at least one loyalty card
• CMO of Orbitz said "If you want loyalty, get a dog."
• Loyalty has to be earned with great experiences across channels
  • Delight, anticipate needs, and provide pleasant surprises
  • Experience never lines up with how organization is built to deliver.  So it requires work.
• Peak-end rule applies
  • Basically, it's those high ("wow moments") we take a customer to that are remembered over consistency of delivery
• Critical that we have a better strategy and operational excellence at managing touch points
  • Draw from un-met needs
  • Create repeatable processes
  • Create spikes ("wow moments") at multiple points along a customer lifecycle

Brandon and David summarize their entire approach pretty early on by saying that the "Experience is the Product."  It think this is worth repeating.

"The Experience is the Product."

Shouldn't this apply to loyalty programs as well?

I'm assuming most people would agree that improving the experience and providing moments of surprise and delight would do more to engender loyalty than any card based incentive program. But this is a daunting task to implement.  A process that will impact disparate systems, groups, divisions and partners.  Something that requires a rethinking of the business from the perspective of the customer experience (inward facing) and not as it is currently structured and built to deliver (outward facing).

It is much easier to design a loyalty program around cash-back and redeemable rewards that are dangled in front of customers with the hope of influencing the desired behavior - ie: continued sales/consumption. But are the rewards used the REWARDS that really matter?  What we've learned in social networking circles is that there are many types of REWARDS that influence people to participate - status, ego, social status, good will, fulfilling experience, and more.

And so, in constructing a loyalty program I would hope to question what REWARDS are of true value to the customers/audience?

I believe quite strongly that people want more than cash rewards. Sure, I'd love a free airline ticket.  Who wouldn't. But I laugh every time I compute how much I have to purchase to get a free $500 flight somewhere.  On one of my cards, I have to purchase over $30,000 to get a $500 ticket.  I'm much more likely to wash things through this card that generate no or limited interest (business expenses) and game the system for the flight.

Shouldn't our loyalty program be a cornerstone of our evangelist program?  And by so doing, be a part of influencing and REWARDING our customers for being our customers?

Amex was running a campaign where semi-famous people were featured on ads with their dreams and desires around money and life spelled out (click on the above image to see the full size version).  Bingo.  Brilliant.  I imagine this applied to everyday card members and I get shivers.

I look forward to your thoughts.

And for anyone like Tim who came for the music.  Here ya go.

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