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Posted by Kendra Lusty on Jul 18, 2019 10:07:28 AM

I live in a small town and our only shoe store, Payless Shoes, recently went out of business. And while their liquidation sales were awesome – $2 per pair boys dress shoes? I bought one in every size! – now what?

Between my elementary-aged kids’ ever changing shoe sizes, and my inability to be comfortable in anything more confining than a flip flop, I never buy shoes online.

In case you missed it, Payless Shoes recently closed every store and its ecommerce operations in US and Canada “as a result of a challenging retail climate.”

If you believe the news, you’d probably say Payless is just the next chain in a long line of mega-retailers to fall victim to the dreaded retail apocalypse.

Last week, we released the article Superior Customer Service: Your Loyalty Program’s Secret Weapon. In it, we discussed the importance of customer service to any business, but especially to those with loyalty programs, which rely on a positive customer experience to succeed. In part 2 of this series below, we give some tips on how to enhance your own customer service efforts.

I worked in a call center. Briefly.

Fresh out of college, I wanted to be making money as I searched for a “real job” so I took a position that was notoriously easy to get, at a place that would hire just about anyone.

Admittedly, this company put a lot of effort into training according to client expectations. However, it’s very hard to make a group of teens, job seekers, recently laid-off, etc., really care.

Confession time. Whenever I have to call customer service, I always cringe, waiting for that dreaded phone tree before I ever get to talk to a person.

I think my record is 18 selections before I got frustrated and pounded 0, which wasn’t listed but thankfully sent me to the operator anyway.

Seriously, I prefer to use a company’s website to find hours of operation, pay bills, and all the other automated tasks you usually find in a phone tree.

So unless one of your options is “If you would like to hear a duck quack” then I’m probably not going to find my answer automated in your system. No, if I’m resorting to dialing a number, I want to talk to a person, dang it.

Rant over.

When membership organizations make bad decisions, we can learn a lot from their mistakes. Here is a tongue-in-cheek look at ten easy ways to smother member loyalty and engagement.  About a 7 minute read.

My role as a marketing consultant has allowed me to work with all types and sizes of membership organizations. From large organizations with a million or so members, to small non-profit and trade groups with just a few thousand members. Most organizations seem to get it. They’ve figured out how to adapt to meet the unique needs of their members, and they can seamlessly integrate our discount platform into their existing suite of member benefits and privileges.

A few others -- dare I say -- are unprepared for success.

They have so many fundamental problems with how they run their organization that adding a powerful engagement tool like ours will actually make matters worse.

After more than a decade in working with various groups, I’ve noticed some important patterns among the few groups that struggle the most. The ones that have a knack for suffocating member engagement.

I think there’s great value in learning from the mistakes of others, so here’s my list of the ten easiest ways an organization can smother their member loyalty and engagement: 

When it comes to running a member benefits or loyalty program, your mama had it all figured out.

In honor of mothers everywhere (including mine who's been a mom for 71 of her 90 years), I’d like to share some life lessons learned from the mother hen herself – and how they can be used as best practices in running a successful membership discount club or loyalty program. 

 

 

Have you seen our Loyalty Statistics: the Ultimate Collection page lately?

If not, you should. It’s ballooned to a jaw-dropping 1000+ statistics curated from across the web over the last 5 years. And it’s still growing.

They come from studies run by industry leaders and top firms across the nation. Organizations and businesses have used it for research, presentations and to influence member benefit strategies. It has become a trusted resource for a host of companies worldwide as they navigate the complex and sometimes confusing notion of “loyalty.”

As obsessed as we are about all things member loyalty and member benefits, we recognize that no one statistic tells the full story. Still, we’ve dedicated this entire blog to exploring every nuance of customer and member loyalty – and as we’ve organized the statistics, a few interesting trends have emerged.

 

#1 - More Loyalty Programs Competing for Attention — and Failing

Attracting people to your loyalty program is a massive undertaking, and nothing is more frustrating than seeing membership numbers rise while usage stays stagnant. After all, what’s the point of having a loyalty program if people aren’t finding value in it?

It was only a few centuries ago (a short time in the grand scale of humanity) that a shopper’s only option was the town’s General Store. It doesn’t take much to earn a person’s loyalty if you’re the only option available.

But now the market is flooded with options. So much so that 63% of Millennials and Gen Z agree they have so many choices, a brand has to show them loyalty in order to gain their business — not the other way around.

The same argument applies to loyalty programs. 65% of consumers reported they actively engage with fewer than half of their loyalty programs and 41% with fewer than a quarter of them. Americans collectively hold 3.8 billion memberships in customer loyalty programs. Consider then, that Millennials report maxing out with activity in 4.2 loyalty programs, and only 3.9 programs for all consumers.

The reality is, your loyalty program might get ignored simply because members are engaged in too many others. And with that kind of competition, you can’t skimp on the value.

The statistics have clearly identified the issue plaguing loyalty platforms everywhere. If you need some ideas, click to view strategies for standing out from the crowd

 

#2 - Losing Loyalty Can Happen Fast, But Winning it Back Still Possible 

Loyalty is hard-won in the first place, so the best-case scenario obviously is to never lose it. However, bad experiences happen. Employees have off days, products are sometimes faulty, benefits sometimes fail to live up to expectations.

And the statistics are showing just what it takes to convince customers to switch away from a brand to which they were previously loyal.

The answer? Not much.

Consumers reported it takes anywhere from 1 (19%) to 3 (58%) bad experiences before they take their business elsewhere. Millennials reported that prices 10% to 15% better at a competitor could get them to switch. And fully half (50%) reported they simply found someone else who better meets their needs.

It may seem discouraging to see how increasingly easy it is to lose once loyal customers to other brands. But don’t throw in the towel. You can actually win them back. They’ve said so themselves.

When brands develop a history of transparency, about 90% of consumers said they are more willing to give brands a second chance after a bad experience.

This means before the bad experience even takes place, people want companies to have a strong social media presence that makes them feel more human. Then, once they’ve built this platform of trust, it’s the perfect forum for making things right. After all, when people see you making things right with one member, it can deepen their trust in you, even when they’re not directly involved.

Plus, it’s important to remember that customer engagement is a cumulative experience. And one bad day will seem so much less important if it’s drowning in a flood of positive ones. 

 

#3 - The Key to Getting Valuable Customer Personal Data? Trust and Value

Data is king. Many companies are hungry for data about their members and customers. After all, armed with valuable demographics, organizations could start segmenting their marketing plans and really delivering up the best value to each individual.

The problem is, most organizations don’t know quite how to get it.

The statistics show that 34% of Millennials won’t join a membership program because the enrollment process is too long. At the end of the day, members aren’t going to give up personal details for nothing.

I myself have joined a group or 2 with the information: First name = Me, Last name = Me, email address = Me@me.com. Why? Well I couldn’t tell if it would be worth my while without signing up first. And I didn’t want them bugging me if it wasn’t.

Trust has to come first. Trust that their membership will bring them value. Trust that you will use their information with care. So what does that mean for organizations? Try asking for the bare minimum of information to help them get in the door. After you’ve developed that trust, you can ask for more detailed information.

Luckily, the statistics also show that the vast majority of people are more than willing to share their information… as long as you make it worth their while. In fact, 90% of consumers are okay with brands knowing more about them if it helps deliver a more rewarding and satisfying shopping experience.

So what will members trade their personal data for? Well, statistics show they are most interested in exclusive deals (60%), the ability to gain points and rewards (56%) or for a more personalized experience (55% of Millennials).

So, if incentives and personalized value will get you the data you’re looking for, make sure that value is present in your loyalty program.

 

Let's Learn Together

There’s a lot more stats where those came from, and a lot more conclusions to be drawn from them. Take a look for yourself. If you notice any trends, we'd love to hear from you. Comment below.