Friday, January 6, 2017

Do Loyalty Programs Create Strong Brands or Lose Customers?

Do you ever drop your key ring because it carries too many loyalty cards? Or do you use one of the many loyalty program applications on your smartphone to access your accounts, points, discount coupons, and other program perks? Whatever way you access your favorite brand’s loyalty program, there is no denying that loyalty programs are effective tools in the brand-building tool chest. However, there must be smart strategies behind the programs, or they will lose their impact and may even lose long-time customers.

Like you, I'm a member of many loyalty programs. While most don’t provide huge cost savings, the $5 coupons or 20 percent off discounts are welcome.

At the conclusion of the recent holiday season, I received an email from a nationally-known fine dining chain that has been in business for 87 years. While I had dined at the restaurant for special occasions throughout my life, I had not visited in about a year. From the wording used in the email communication, you would have thought my absence was a crisis of international concern. But upon further reading, the email takes a turn to the dark side with terms such as “inactive status” and “no longer.”

The subject of the email was: WE MISS YOU!

The email message follows below in its entirety, and was signed by the restaurant’s President and CEO:
Dear Debbie,

We've noticed that you haven't been in to dine with us for more than 15 months. As a VIP, the points in your account will never expire. However, after 18 months of inactivity, your account status will become inactive, and you will no longer receive the full benefits of membership.

To maintain active status, you can:
* Dine with your VIP card
* Buy Gift Cards or eGift Cards
* Purchase gifts from our shop

If you have questions about your account, please call Member Services at (number). If there is a specific reason you have not visited, please call me directly at (number). We continually strive to better serve our guests. On behalf of all of us at (restaurant’s name), we look forward to serving you again. (Signed by the President/CEO)

With such a long and rich history, the restaurant welcomes Los Angeles natives and tourists on a daily basis, and during the holiday season, welcomes football teams who compete in the Rose Bowl football game. In fact, publicity abounds for this restaurant during December every year – publicity that every restaurant can only dream about. So why, I wondered, would a communications team write such a strongly-worded email that did not thank me for my lengthy customer status?

Perhaps, a better email would have been:
Dear Ms. Laskey,

We hope you had a happy and healthy holiday season! We missed you during the holidays and would like to welcome you in early 2017.

Our VIP guests are very important to us, and we are thankful that you choose our restaurant for family celebrations and other special occasions. As a VIP, your points never expire. But to entice you to visit soon, we’d like to offer you a complimentary dessert or complimentary glass of champagne (or $25 coupon) during January or February.

If you have questions about your account, please call Member Services at (number). If there is a specific reason you have not visited recently, please call me directly at (number), so I can address any concerns you may have. Our goal is to continually improve our guest experience, so on behalf of all of us at (restaurant name), we look forward to serving you and your family again soon.

It seems as if my accumulated points are more important to this restaurant than they are to me. All I ever expected from this restaurant was exceptional guest service and delicious food. But based on the tone of the email, despite many years of family celebrations, I will not return to this restaurant. One poorly written email led to the loss of a long-time repeat customer. This restaurant’s loyalty program was an example of an #epicservicefail.

If you think you know the restaurant, chime in. Happy New Year!

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