Author » Bridget Flynn ProctorVice President of Creative Services

Loyalty Programs That Bite You Back

Posted by Bridget Flynn Proctor on Tuesday, July 20, 2010 at 12:24 PM  |  More From This Author »
Customer loyalty programs can be a great tool for promoting long-lasting relationships with your current customers. In fact, we spend a lot of time talking with our clients about how it’s often easier to retain and grow your current customer base by getting them to continue service each month, purchase more, upgrade services, etc, than it may be to convert an entirely new customer to your pool. However, while customer loyalty programs are a good tool for increasing satisfaction and retention, they can have the total opposite effect, creating both customer dissatisfaction and disengagement, when they are poorly implemented.

Getting bit for being loyal
Loyal dog biting backMy case in point...yesterday we received a letter in the mail from my husband’s cell phone company. The letter thanked us for being one of the company’s “most valuable customers,” and for our “continued loyalty” offered us a special gift at no charge. Okay, cool! The gift, a free mini cell tower, could be picked up at our local cell phone provider store. Here’s what the letter said about the free gift, “The mini cell tower will help boost the bars you receive in your home so if you are not getting the signal you expect in your house, this may be the perfect solution for you.”

My husband gets garbage for signal at our house – too many other places as well. This offer put him on cloud nine. The mini cell tower would be the perfect solution and because of our “loyalty” the company was taking care of it for us. That is, until my husband called to verify pickup of the free gift.

See, while the product was being given to us “free of charge,” the cost to operate the free gift each month would be $10 plus tax. How does that reward us for our loyalty? Where’s the add service, the extra value? How is this company really stepping up to show us their thanks? They’re not.

For this to have worked as a true loyalty reward, the cell tower and service should have both been free – even for a year. Instead it doesn’t work, because essentially while the company tells us we are valued and loyal, it promises we will never be treated as such. By pointing out a real problem and then basically forcing the customer to pay the price to fix it, the cell phone company doesn’t meet the objective of the loyalty letter, to tell the customer “thank you.”

And so, my husband’s response to the customer service representative on the phone after inquiring about his free gift was, “I already pay more than $120 a month for your cell phone service. Now because I’m a loyal customer, I need to pay $10 extra a month just so I can use the service I’m already paying for!? No thanks. I think it is time I made a switch to a carrier with more coverage.” 

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