Customer Loyalty: How Fickle Are We, Really?

I buy a ton of books each year, and I have the Barnes and Noble discount card because I can shop online or in the store, which means Waldenbooks in the mall and Amazon online get less action from me, unless they have a superlow price (I do still check). Usually though, I go to B&N. But if I had an experience similar to yours, I would probably drop them.

Well, in a situation like the Starbucks one, I might give them another shot at making things right. But just one.

Hey, it's easy to treat people well when things are going swimmingly. Regular customers? Yeah, give them some perks, like the loyalty card.

But when something goes wrong, that's when you have to go the extra mile. Or maybe 10.

Great question. I don't think most brands get a second chance, unless there is not a viable second alternative. If Peet's down the street was not comparable or accessible, then Starbucks it is. Regardless, loyalty is gone, but usage may remain for convenience. The company never knows there is an issue, until you up and leave for a competitor that meets your need. The key is the ability to make the situation right or better than right. Seriously, how many companies can do that?

Let's face the facts, branding sells and one lost customer to Starbucks is replaced with many more. What person would pay $2-$5 for a cup of average coffee? The answer plenty of people. The US population still is hooked on gimmicks and paying more makes them feel like they are getting something better in return. Probably not, but Starbucks is a growing tradition among the X-generation.

By the way, I have a great idea…Anyone interested.

Customer loyalty programs are valuable. Now whether they are worth the money companies put into them are questionable. Could Starbucks make their program easier, probably, and it's important that they do because in the big picture loyalty is incredibly important. How can loyalty programs be simpilier and easier so a phone rep doesn't screw up the relationship?

I love the conversation this is drumming up!

Dave, please do share that great idea with us...

And Mark, it'd be great to hear more of your thoughts on how companies could simplify their loyalty programs.

Do you think it's something as simple as empowering the phone reps to make on-the-spot decisions, like going ahead and cancelling my lost card if that's what I need? Or is there something more procedural, at the company level, that needs to happen?

are you sure that you have lost all loyalty to starbuck's or are you just making a snap decision based on a negative experience? is this going to stick? are we living so fast that our decisions are made often in haste? i believe that customer loyalty is a marathon not a sprint, both for the customer and the company. you don't get customer loyalty fast and you don't give loyalty fast.

Loyalty has to be earned, Case in point!! We purchased a Brand NEW 2002 F150 in December of 2002. It took the salewomen two weeks to get me buy the truck for my wife. I have over 7 years experience as a Supply Chain Mgr negoctiating. We took delivery of the truck on a Friday evening around 7:00pm. On Saturday my wife was driving her new truck with my daughter and I as passengers on I40 through Albuquerque. The state had just completed construction of the new interchange and some debris (RE-Barb)was left in the middle of the road which was hit by the vehicle on front of us and lodge in the rear axle locking the rear brakes and slamming the side of the pickup. The truck was towed back to dealer from which we had taken delivery from not sixteen hours later. The saleswomen was heart broken was able give us a loaner for free and worked everything out with our insurance to get the vehicle back to my wife quickley. They put us in at the front of the line in the service department. To this day we get a call or a card from Sally our saleswoment even though we have since moved to the other end of the state of New Mexico. We will go back to her for all our future truck needs.

Alison - YES! The rep should be able to cancel your card on the spot. Who cares what happened to the card. You are the customer - what do you want?

The card is their loyalty program set up to reward you - how rewarded do you feel right now?

From the book; "How to win customers and keep them for life" (published in 1987).

A typical business hears from obly 4% of its dissatisfied customers. The other 96% just quitely go away and 91% will never come back. That represents a serious finanical loss for companies whose people don't know how to treat customers, and a tremendous gain for those that do.
A typical dissatisfied customer will tell eight to ten people about their problem. One in five will tell twenty. It takes 12 positive service incidents to make up for one negative incident.
Seven out of 10 complaining customers will do business with you again if you reslove the complaint in their favor. If you resolve it on the spot, 95% will do business with you again. On average, a satisfied cusomter will tell five people about the problem and how it was satisfactorily resolved.
The average business spends six times more to attract new customers than it does to keep old ones. Yet customer loyalty is in most cases worth ten times the price of a single purchase.

This is simple - you spent an hour trying to get this resolved, it wasn't and how many people knew about it and might never sign up for that loyalty program becuase of your blog post? It cost the company some amount of money to deal with you and now they may have to spend more to get you back or replace you and the possible people who won't use them now.

Who cares about whether loyalty programs work or don't. This is customer service 101 and it should be a no-brainer from a business process standpoint as well; let a customer service rep satisfy any customer request that doesn't cost the company any money.

Something tells me that Alison Overholt can geto get a years supply of free Starbucks coffee, but for that to happen the trick is get someone at Starbucks Head Office to notice. That's the way I look at customer loyalty programs, in the way Adam Sandler's character thinks about promotional and marketing programs in the movie "Punch Drunk Love" - use it, abuse it or lose it. We in the CRM and nutty evangelism age are the customers and we are all such fine things!

M.
zorromark@consultant.com
(Mark Twain wasn't Mark Twain, Mark Zorro isn't Mark Zorro)
http://www.markzorro.blogspot.com