customer-loyalty-programs-gone-wrongI don’t want to brag, but my son is kind of a big deal.

You see, he’s Star of the Day today. Just for the day, mind you. But tomorrow he’ll be the Line Leader, and after that the Door Holder. There’s 17 kids in his class, and each one gets to be the Star of the Day, then Line Leader, and then Door Holder.

Falling from grace with a soft landing.

It’s a good system, and one that I was reminded of last week while I was sitting on a plane. Because it’s December again, and December means chasing status. It’s your last chance this year to show your favorite airline and hotel how much you love them, in hopes that they’ll love you back next year. So sitting on a plane in December invariably means hearing comments like “I just made Gold with this flight” or “Looks like I’m going to miss Diamond next year”.

It’s not usually about the status itself, or at least not the title. For most people, especially business travelers, status translates into ease, and ease matters a lot. It’s easier to get through security, to board, to get through to a customer service rep, to get a flight rebooked, etc., etc.

Status is an airline’s way of saying “you’re special to us, so we’re going to make your life easier.

And that makes sense. You want your customers to have enjoyable experiences with you. You want your most valuable customers to have the most enjoyable experiences. That’s a concept any business can embrace. Many small businesses already do this, even if only informally. As you get to know your customers, you anticipate their needs and respond better to them, and your customers enjoy a more positive experience.

So far, so good. But what about the flip side? What about the person who used to be a great customer, then gradually stopped showing up so often? That’s what happened to me this year with my hotel loyalty program. A few months without a stay, and I went from Elite in 2012 to Nobody in 2013.

And that’s when I experienced the flaw in the system.

Not from my point of view as a customer, but from the company’s perspective.

What’s the flaw? It only takes one “off” year to go from Diamond to Nobody. And once your customers are Nobodies again, they don’t have as much incentive to stay loyal to you (the brand that dumped them). In fact, it’s a great time for them to defect. Plus, that quick demotion means you lose credibility… you just showed your customers that you don’t really care about them, you just care about their money.

If you’re a huge airline or hotel chain, you probably don’t have much of an incentive to change your approach. But for small businesses, this is something to think about. Absolutely, you want to recognize and reward your customers in a way that keeps them coming back. At the same time, don’t alienate your dormant customers – reach out to them instead. It’s a mistake to assume that all former customers are dissatisfied or have actively walked away from you. Many may still have a soft spot for you; perhaps some can’t wait to come to you again when the time is right.

That is, if you don’t do anything to diminish them in the meantime.

That’s what I like about our kids’ school. They figured out that children don’t like being told they’re special one day, and not the next. Don’t you think your customers feel the same way?

About TomLogue (71 Posts)

Tom Logue is Vice President of Message Factors, a Memphis-based marketing research firm. Tom has helped hundreds of companies discover how to improve their relationships with customers, prospects, and employees. In addition, Tom has been a speaker and presenter at numerous conferences on topics ranging from marketing research to general branding and marketing strategies.

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