The first step in the loyalty marketing value chain is engagement. In fact, I treat engagement as an essential part of every step along the value chain, from awareness, to trial, to usage and retention. Think about it, to raise awareness of your product, service, brand, you’ve got to get the attention of potential buyers. Whether you call that an image or branding campaign, at the core you’ve got to engage people long enough to communicate your message. Similar examples can be used for the steps that follow along the loyalty value chain.
Harley Davidson has long recognized the value of engagement and has built on the fanaticism of its riders to create a clubby atmosphere that reinforces the wind-in-the-hair lifestyle while clearly positioning their bikes as the ones to ride. Harley has been wise in forming partnerships with compatible brands like Best Western hotels to bring post-purchase value to its customers. To deepen its relationship with a large audience of bikers, Best Western created Ride Rewards, inviting members to “book your next adventure with Harley Davidson and Best Western Hotels”.
They’ve also been smart in creating special events that foster memories only a Harley Davidson owner can enjoy. Call it divine inspiration, but somehow the company arranged a blessing for thousands of Harley riders in St. Peter’s square at the Vatican over the weekend. You can read about the event here and two comments heard on a CBS News report pointed up the meaning of these events to participants. One Harley owner was asked which he thought was more memorable, the blessing or the weekend ride. Almost blushing, he deferred a direct answer. Another rider was asked what he thought about the Papal blessing and replied “maybe it will increase the value of my bike”. It’s fun all around and Harley is one of the most brilliant in leveraging “smart partnering” to increase customer loyalty.
Research has shown that the step along the loyalty value chain that shows the greatest opportunity to increase customer value and satisfaction is reward redemption. My Father’s Day experience with a local restaurant program illustrates how organizations can easily fumble this delicate interaction, in turn jeopardizing the longer term value of their loyalty program.
I chose to dine with my family at this local sports bar on Father’s Day for many reasons, two contributing ones being a few meal specials that appealed to our group and the fact that I had $20 able to be redeemed towards our tab. After an enjoyable meal, we presented a receipt generated by the restaurant showing my name, member number and balance able to be redeemed. The waitress asked me if I had my plastic membership card as proof of identification and politely told me that I could not redeem without it.
In a world of too many cards, user names and passwords, reducing friction for redemption in a loyalty program should be a goal for any organization sponsoring a loyalty program. In our post 9-11 world, we’ve been forced to align our exact legal names on passports and driver’s licenses with frequent flyer programs in order to get credit for our flights, not to mention to get on board. I offered my driver’s license to the wait staff at the restaurant and found it treated like an irrelevant scrap of paper where I had scrawled my name. Bordering on embarrassing my teenage companions, I let the matter go by.
The restaurant is a good one, but it’s brand is nothing like Harley Davidson. They are fighting for every dining dollar in a tough market and are using their rewards program as a key competitive tool. I was asked by both the hostess and our waitress if I was a program member in the process of being seated, so the organization has trained its staff well to raise program awareness and stimulate customer engagement in simple ways.
All of that effort is only a good setup to the bigger opportunity – the reward redemption. Like a basketball team playing hard the first three quarters, but not finishing the game, organizations need to remember that their attention to program rules and operational excellence is critical to success.