Loyalty Truth

During 2013, you may have struggled through endless planning sessions in pursuit of new strategies to capture customer attention, trigger new sales, and increase satisfaction and loyalty. You may have invested heavily in data analytics or CRM systems as a framework for your plans.

As you turn the corner into 2014, there’s one suggestion I can share with you to preserve the investment you’ve made in customer marketing during 2013 and to increase your chances of success in 2014.

Avoid the Loyalty Asterisk !

We originally coined the term in the early days of LoyaltyTruth.com, circa 2006. The following is an excerpt from two posts describing the Loyalty Asterisk. If you search this site by the term “Loyalty Asterisk”, you’ll find examples we have identified over the years and we’ll have more to say on this subject during 2014.

Loyalty Marketing and the Asterisk

We have created a world with so many things that we cannot live without.

Cell phones, instant messaging, and unlimited texting all qualify, with the prioritization of those vices loosely correlated to your age and techno-savvy quotient. If kids were cowboys, the six shooters on their belt would be IM on one side and unlimited mobile phone texting on the other.

The highway billboard I recently passed shouting “dnt txt whl u drv” hints that we’ve let the devices exert too much influence over us. But, as Stuart Scott advises on Sportscenter “don’t hate the player, hate the game”, I would urge you to not hate the devices or the technology, just the way they are often put to use.

In the business world, we have indispensable items as well. One of them is so implausibly small that it defies logic.

It’s the asterisk!

This little character is making a name in all corners of life, not just in print ads for cars and trucks, but also in sports record books – thanks to Lance Armstrong, Pete Rose, Barry Bonds, Marion Jones and others.

The asterisk even landed among the top 10 internet searches on Ask.com. We don’t really understand why, but a spokesman who declined to elaborate further said the symbol is “linked to illicit activity the company blocks”.

The television equivalent of the asterisk is the paragraph of fine print that is so small it can only be deciphered by hitting the pause button on your DVR. In radio, it is the gushy blitz of words that signifies the end of most ad spots.

The meaning of the asterisk is simple. A suitable synonym would be “disclaimer”. Need a modern definition of disclaimer adapted for the world of commerce? It’s the legal department’s hedging of lofty promises made by the Marketing department.

Loyalty Marketing versions of the asterisk include increasing the points required for a reward, adding fees for redemptions and tightening expiration rules – all  conditions that lessen the value of the program for consumers. It’s a game of perception that marketers are too often losing. Insiders know these rule changes must be made, though it does not prevent consumers from viewing them as evil.

It is counter-productive to attempt to influence a particular consumer behavior with rewards and recognition while placing a myriad of constraints on the same behavior. Customers end up feeling confused and frustrated, two emotions bound to engender anything but “loyalty”.

As loyalty marketing has evolved from a novel tactic to become a standard tool in the marketing mix of most major consumer facing organizations, the articulation of most programs is increasingly similar. In airline, hotel, and financial services companies, offering a program that awards points or miles for consumer patronage is essentially a cost of doing business.

Whether this form of marketing strategy continues to influence consumer purchase behavior as intended will depend on how quickly the next wave of innovation emerges and can be practically applied.

As you consider tweaking program rules to reign in benefits and reduce costs, you should keep in mind that seemingly innocent program rule changes can undermine broad brand promises spouted by the CEO in the annual report. Frothy promises about making commitments to a customer centric strategy are heavily diluted by the proliferation of asterisks in loyalty program communications.

It’s time for marketers to “say what they mean and mean what they say”. Building enduring customer loyalty is complicated enough. Don’t undermine your substantial investment in customer centricity with a generous sprinkling of asterisks.

Let’s hasten the next wave of innovation in the Loyalty marketing business and stop changing program rules from becoming the most commonly communicated message in our e-newsletters.

Editor’s Note: Even your employees notice the Loyalty Asterisk. Sometimes they even take the customer’s side in dealing with customer complaints. One customer service agent I spoke with recently took time to show me how the marketing offer I was questioning was anything but transparent. The asterisks in the same communications piece systematically undermined most of the perceived value offered by the company.