It's a dark, cold night. We're gathered outside around the campfire. There's a noticeable uneasy feeling lurking in the air.
So with flashlight in hand, our scary story begins...
...Once upon a time there was a consumer that met a brand and became its devoted customer.
The brand also expressed it's love for the customer with a loyalty program and promise of valuable rewards.
But the brand failed to live up to its loyal customer's expectations.
And so, what was once a devout customer turned into a beastly creature that threatened the brand, eager to gain revenge.
So what became of the brand and customer that were once in love?
It’s one of the oldest stories in the book, and a good reminder for brands out there on what can happen when you don’t deliver on customer expectations. Your most loyal customers can go from brand advocates to brand detractors – something we refer to as the Dr. Jekyll/Mr. Hyde predicament. But don't fret too much, you still have the power to choose how your story ends.
This story stood the test of time yet again when Starbucks recently made some major changes to its rewards program, catching some of its loyal customers off guard.
Its old program let customers earn 2 points (stars) for every dollar spent. Once their first point was earned, customers became green level members. Green level members received things like free in-store refills and birthday deals. After a customer accumulated 300 stars during a calendar year, they bumped up to gold status. Gold members received a free drink or pastry for 125 stars, were given opportunities to earn double stars monthly, and a personalized membership card.
With the new Starbucks loyalty program there’s no tier status, instead it’s set up to allow customers to start utilizing points sooner in smaller amounts. For example, earning just 25 stars gets you add-ons like flavored syrup, while 50 stars lands you a free coffee, hot tea or bakery item. But in order to receive the most popular items for free, like a handcrafted drink or hot breakfast sandwich, customers must earn 150 stars – 25 points higher than the previous program. And boy was Starbucks in hot water with its most die-hard members after they realized the value of their stars had decreased.
Some customers even went to bed with enough points for a free breakfast sandwich or two and woke up to those being taken away.
Really the majority of people taking the biggest hit with the new Starbucks rewards program are its most avid customers, as they are the ones that rack up enough points to become gold members, earning the fancy free drinks. It all comes together to create the perfect formula, turning Starbucks’ most loyal customers (Dr. Jekyll) into its harshest critics (Mr. Hyde).
This new Starbucks rewards iteration has been active for less than 6 months, so the jury’s still out. We’ll see what the future holds and the impact it makes on what were once Starbucks’ most loyal customers.
To understand the true severity of situations where loyal customers feel let down or betrayed, it’s important to first take a look at what the real life benefits of loyal customers actually are:
So how
With that said, we’ve already talked about the benefits of happy loyal customers (a.k.a. Dr. Jekylls). The other part of that equation is learning what the consequences are of a loyal customer scorned (a.k.a. Mr. Hyde). Here are two of the biggest problems scorned customers can cause:
Our upset customers and their complaints can often benefit us by helping us discover different points of view, valuable feedback, reassess our current practices and beliefs, and help us make our products and services better.
So, don’t worry. All is not lost. Every angry customer represents an opportunity to win them back – 80% of switchers feel the company could have done something to retain them.
It really boils down to the way customers perceive they are being treated, how quickly a complaint is handled, and the way in which it is taken care of. 70% of buying experiences are based on the way the customer feels they are being treated, and 80% of unhappy customers will come back if you've treated them fairly (this stat rises to more than 90% if you respond immediately to their complaint).
It’s also a good idea to make sure you’re continually providing value added benefits to committed customers throughout their relationship with your brand. What’s not cool is only offering something of real value after they’ve made a complaint to put out the fire. Make sure your customer service and experience strategies are preventative instead of just reactive.
In short, don’t ignore unhappy customers. The best discount programs acknowledge customer feedback, make them feel heard, and if possible, do something to rectify it. For more details, read our article: How to Turn Online Haters into Loyal Customers.