Customer loyalty and loyalty programs

A look at the long-awaited customer loyalty.

If our customers have more and more options, if the messages they receive multiply rapidly and if we have nothing better to offer, why are they going to keep buying from us?

Introduction

From the days of "maximarketing" by Rapp and Collins or when people began to talk about relationship marketing, database marketing (?) And all the others ("?" Again), the bases of what we have known for a few years as CRM (Customer Relationship Management) or Management / Administration of Customer Relationships (something like GRC or ARC would come to be in our language, but I do not think it is too interesting).

Tools, concepts, "strategies" or whatever we want to call it, the CRM brought out and, in some cases, depending on the interlocutor, even taking it as his own idea, the need to identify the tastes and preferences of consumers, in order to know them better and to be in a better position to satisfy them first and to retain them later… ah, it doesn't seem too new, does it? Well, me neither…

Remembering forgotten pillars

If you belong to the world of marketing and business, you will be very clear that the most important thing is the customer. I mean, no matter how much later in practice you are in a position to serve you better or worse, I want to believe that at least it is clear that without customers, you have no business… That is clear, right?

But you already knew that. Without going any further, when he started with his company, business or undertaking, he was very clear that the most important thing at that time was to get the first client… and that he continue to buy from him… and then the second… and that he continue to buy from him… and like this… until at some point, probably, he has also realized that it was worth trying to sell more to the clients he had gotten, bah, I imagine he will have realized, for something they were his clients…

So, if you went through a process more or less similar to the one described, it is very possible that we will understand each other better from now on.

Returning, if you already recognized the importance of your customers and envisioned the value of making them continue to buy from you, then you were already thinking about working for their loyalty, and note that I am talking about when you started, so this of the loyalty of the client seems that it is not new matter.

But now the question arises that, possibly, has also been asked at some point: how can I keep and sell more to my current clients? Well, from now on the issue becomes a little more complex, fundamentally, because the scenario for doing business today is no longer the same as it was in the past, it is more, depending on the market in which your company participates., It is possible that today's scenario is very different from yesterday's scenario, that simple and that complicated.

Know the customer

No more no less. From there it is that we can do marketing and precisely that was and is the way to try to retain current customers and try to sell them more, that is what you have to do: get to know them.

Then again we return to the topic of CRM, although we are not going to treat it as something new, but we are going to analyze it from its very essence, that essence that has to do with working, dedicating and striving all day and every day to know better to customers, to take advantage of each interaction, each visit to our premises, each telephone call, each moment of truth, to obtain information about each one of them, always thinking about their use for the subsequent construction of a better, adapted and personalized to each of them. Now he did realize that complexity I was talking about, I'm sure (well, almost).

So, let's think about it from another point of view, to which people are you faithful, loyal? Well, I already asked him many questions, I will answer for myself: I am faithful to the people who know me, who understand me, who care about me, who are aware of what I need, who help me, who love me, that is, basically, I am faithful and loyal to those who make my life easier and more beautiful. She follows me?

Of course he follows me! You will have already realized that this is how human beings behave and we are precisely human beings who buy… and all that is what we want from someone to give them our fidelity, our loyalty, then, to achieve that, to reach that level of connection, what you have to do is know everything we can about our clients, what they like, what they don't like, where they prefer to spend their holidays, where they study, what they study, where they work, what is their occupation, how it is composed your family, what is your income level… all that? Yes, all that and much more…

So I need the CRM…

Well, no… actually, if you already understood all of the above, you are already thinking in “CRM mode”. In other words, the first step has already been taken. Everything seems to indicate, then, that if we have the greatest amount of relevant information (depending on each case, certain information will be more or less relevant) about our clients, we know them better, we understand them better, we can be closer to identifying what they need, we can help them better… can we make them become faithful and loyal to our company, to our brand, to our product? I do not have a definitive answer that will reassure you, what I can tell you is that if you work to achieve all that, part of the way is already paved.

Another very important issue that I cannot ignore is what you may already be asking yourself: how to retain, process and analyze so much information? Well then, let's keep talking about CRM…

For some time now, with the constant and increasingly vertiginous advance of technology, different software development companies have been taking note of this need for companies to know their customers and have put to work (Will it be This is also an example of CRM?… I think it also has some "Business Intelligence", although we will not talk about that now). In this way, today companies and businesses have software tools that contribute to the processing and ordering of so much information so that it is available in a timely manner, because of course, it is possible that my neighbor at the corner pizzeria knows that I like pizza "Neapolitan" and with garlic,But surely it is something more complicated for a seller of Ona Saez from Unicenter Shopping to have at hand what was my last purchase and where I actually made it. Why would an Ona Saez salesperson want to know what my last purchase was? And… to get to know me better and for everything we have been talking about, can I explain myself?

So now, let's see if it is clear to us: CRM is a concept, extremely valuable and very useful to achieve the loyalty and loyalty of our clients, but it is not a software, it is not a computer program, although it is true that these programs contribute to making CRM management more efficient.

Do you want another example?

Perfect, here is a very brief example, before returning to the topic of customer loyalty:

Surely you have heard or referred to what we know as a “medical history”… Yes, exactly! Do you remember that your family doctor, your ophthalmologist, your children's pediatrician, your dentist, all of them kept (and keep calculations) a record of everything that was happening to their health? Remember? Well, this work of recording, of storage, then allowed the professional, on his next visit, to be aware of what his ailments were, what the last prescription he had issued and also knew what he had to ask him after greeting him: "How do you feel about the flu?" Didn't you feel that your doctor knew you and cared about your health? Isn't it hard for you to change your doctor? Well, that's what it's about.

Saving the distances, working with a CRM approach, the "medical history" of each of our clients is the one that contains the information we have to better serve them.

(Just in case you were wondering: your doctor doesn't do CRM… well, I don't know…)

The "loyalty" programs

However, without prejudice to the foregoing, there are also a significant number of what is known as loyalty, benefit or incentive programs, such as: "La Nación benefits club", "American Express Membership Rewards", “YPF Serviclub”, “Paseo Comafi” (Banco Comafi), “Discoplus” (Disco Supermarkets) or the soon to disappear “Travelpass” card, to name just a few.

To some extent, these and / or other "loyalty programs" can contribute to the retention of customers and in some cases even to attract new ones, but pay special attention to the words used, we speak of "retention" and "recruitment "… we were not talking about" loyalty "… So?

Of course, I explain: although there are different models and mechanisms depending on the program to which we refer, surely you already know more or less how they work. The customer buys gasoline or uses his credit card and "adds points" (or "miles") that will then be exchanged at some point for one of the "wonderful prizes" that the company that organizes or participates in the program makes available to them… Then, after successive purchases and accumulated miles / points, one, as a customer, accesses “happy” to his “set of knives for the barbecue”, “towel and towel set for the beach” (surely with the sponsor brand very large and visible) or "free" ticket to a chosen destination… and certainly not bad, just that I dare not say that, indeed, it is about loyalty.

That is to say, these programs, surely and as I said before, can contribute as an incentive to consumption or customer retention, since "if you stop buying from us, you do not add points (for example) and it is further from the aspired prize", then, it is "convenient" to continue buying that brand… or it is also possible that you can transfer your consumption to one of your credit cards because it is through which you can add "miles" for that long-awaited trip… or, as long as you do not know I finished before, refueling at the service station "$ 6 = 1 point" (where I usually charge), but, I insist, I'm not sure I'm talking about loyalty, what's more, sometimes it even looks more like a "Bribery"… or a "bribe", if we wanted to place ourselves at an overly critical extreme.

Anyway, it is not bad and it is not "cheating". Nor can the customer be underestimated. The customer, consciously or unconsciously, always ends up buying where his perception of value, throws the best equation for his benefit. Always.

This is value

Yes, yes, I know it sounded familiar… it's true, I borrowed it…)

We were talking about loyalty and at this point it is already a necessity for me to tell you that knowing the tastes and preferences of your customers and all that is also very useful for the construction of a program or for the execution of actions that we can call of loyalty, but, of course, for this we must be attentive, very attentive and be able to identify the true motivations and interests of customers, it must be something that helps us build a unique and differential value proposition… it must be something that only we can offer them or, rather, it must be something that, effectively, makes the client feel that, recognizing their needs and desires inscribed on a symbolic level, we care about them, that we take care of them,that we strive to know and serve you better than anyone, so now we will be talking about loyalty.

Much simpler examples of what loyalty is NOT

I think it is important in this part to share with you a couple of personal experiences1 that I understand can help contextualize what I want to convey to you… because sometimes good intentions are not enough, a loyalty program or action must respond to a strategy, tell with a defined tactic and a correct and pertinent execution, otherwise, it will not be enough to achieve the objectives that are pursued.

Case: "La Parrilla del Niño Julio"

It is possible that sometimes the same thing happens in your house as in mine, for example, you and your wife arrive tired from your workday and are not willing to cook, so you resort to a delivery service that allows you to solve dinner without much effort, well, in my case it is usually like that and one of those delivery services that we usually use is that of the aforementioned grill.

The particular thing about this case is that approximately 10 minutes before or after the last bite the phone rings and someone from "La Parrilla…" asks from the other side "Are you satisfied with your order?", So far everything seems positive, right ? Well, it could certainly be positive, if it weren't for the fact that in one of those "moments of truth" something in the order had not been quite right and when I answered the question of rigor, they had nothing comforting to tell me about the other side… (in addition, Do you like to be called on the phone while you are having dinner?)

Again: Good intentions are not enough. Strategy, tactics, and proper implementation are required.

Case: "Banco Galicia"

One of my credit cards is from Banco Galicia and it was issued when I was a student, about ten years ago, and despite the many other products that I used and still use from the bank, only once and shortly time to get the card, they decided to increase my credit limit and purchase.

To tell the truth, it is not the card that I use most regularly, but not long ago I had the intention of taking advantage of a discount that Falabella offered as an affiliate of the Banco Galicia benefits program, so I called the bank to arrange an increase in the limit of credit and purchase…

To my surprise, the lady who so kindly attended to me explained and detailed a series of procedures that I had to carry out, documentation through, to be able to carry out the management successfully. But the point of the example is not only the cumbersomeness of the procedure, but the competitiveness of the banking sector itself is known and more specifically the constant "war" to obtain clients from the neighboring bank, calling them to offer them new accounts and credit cards2 (without going further afield, about 2 hours ago the HSBC Bank called me to "double the limits of my cards with bank products"), which allows us to think that banks should be more than attentive in caring for and satisfying their customers.

Again: It is essential to know customers better and better in order to be able to satisfy them better and better. It is not enough to launch a benefits program, if later the client cannot take advantage of it in the best way.

Doing CRM is not having a software with customer information and not knowing how to take advantage of it or simply not doing it.

That is to say…

After having accompanied me throughout these pages, you must have already realized that almost all benefit or incentive programs can be more or less imitable, but perhaps you already share with me that neither the points nor the "knife sets" they buy the loyalty or loyalty of their client, simply because loyalty and loyalty are not values for sale, but are a reward and recognition. An award and recognition that we generally give to those who know how to always be close to us, understand us, treat us well and make our lives easier.

(Ah, I would like to be able to tell you how to retain your customers, but for that you would have to know them a little)

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1 More information in “El ¿Nuevo? Marketing of Experience ”- Gustavo Alonso

2 This is so, because banks have absolute freedom to access the financial situation of their potential customers. At least, here in Argentina.

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Recommended bibliography

Advanced Marketing - Alberto LevyStrategic Marketing - Alberto WilenskyThe Third Wave - Alvin TofflerThe Experience Economy - Joseph Pine - James H. GilmoreThe New? Experience Marketing - White Paper - Gustavo Alonso The Sense of the Human - Humberto Maturana

Queries / Comments / Suggestions / Experiences: [email protected]

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