Most companies understand the tremendous value associated with exceptionally loyal clients. That's the reason why businesses of every size and form have implemented loyalty applications to maintain their best clients coming back again and again. Unfortunately, this traditional loyalty model has grown tired and provides very little differentiation in the market today. As a result, it is time to rethink customer devotion.
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THE LOYALTY FLOOD
Unfortunately for many companies, any advantage that was initially gained through loyal programs has quickly eroded. While airline, hotel, and car rental agencies were the leaders of mainstream loyalty programs, other businesses were quick to leap on the loyalty program bandwagon. The outcome is a business environment where every restaurant, gas station and pet store has some type of loyalty card or application.
Consequently, having a loyalty program is no longer a competitive differentiator. It is now a mainstay of a company environment where loyalty applications have become a commodity and a potential detractor to the overall customer experience. They get in the way of business efficiency - often requiring an additional step from the consumer experience procedure. They've become nothing more than another solution to offer a price promotion. Loyalty programs may also create disdain for customers that can't obtain the benefits or special pricing provided exclusively to program associates.
WHEN LOYALTY PROGRAMS BITE BACK
Some loyalty programs miss the point entirely and may actually drive customers away. Hilton Hotels, as an instance, includes a longstanding loyalty program called Hilton Honors that accumulates points based on the number of overnight stays at their network of resorts. To get a livelihood traveller, these loyalty points can continue to accumulate within a 10 or even 20-year time period.
On the outside, Hilton's loyalty program appears simple and straightforward; The more a customer remains - the greater rewards they will receive. In certain circumstances, however, the fine print can really bite back. If changes to a customer's traveling habits keep them out of a Hilton home for 12 consecutive months, the client will shed ALL accumulated points and privileges. This coverage, in effect, erases 20 years of devotion and any associated benefits or rewards.
The client might have been faithful and may even have been an advocate for Hilton. Penalizing a loyal client for absence of action for 12 weeks will certainly harm any good will that may have been gathered over the prior 10 to 20 year time period.
IT'S TIME TO RETHINK CUSTOMER LOYALTY
If businesses wish to reap the advantages of accurate customer loyalty - it is time to rethink what client loyalty really means. Customer loyalty isn't obtained by holding a card, accumulating points, or redeeming rewards. What's more, loyalty can not be quantified simply by client longevity, frequency, or buy quantity. Customer loyalty isn't a one-way street; it cannot be determined solely based on what the client has done for the company.
Instead, customer loyalty should be turned upside down. Perhaps more firms would get it right if they measured loyalty in terms of the level to which the COMPANY is loyal to the customer as opposed to vice versa. Companies should aim to remember repeat customers, address them as people, call them by their name, and then treat them unique.
Think about the simple lesson of customer loyalty which was demonstrated per week about the 1980's sitcom "Cheers", the pub where everybody knows your title: At the beginning of each show, the pub's best client, 'Norm', could enter the bar and proceed to 'his' barstool. There wasn't any loyalty application, no card to scan, and no 'platinum' amount needed to gain entry. Everyone really knew his name, he had his very own seat in the pub and the bar owner knew exactly what he needed to drink. 'Norm' was indeed loyal, but the institution was extremely loyal to him as well.