What Is Customer Loyalty About?

loyaltyApparently the 12th Annual Accenture Customer Loyalty Survey found consumers/customers are less loyal today despite billions of dollars spent on loyalty by companies. How does that happen?

Maybe because, as is often the case, most companies are spending on the wrong things, like loyalty programs. Loyalty programs don’t, and never have, created loyal customers; unless you consider ‘bribed loyalty’ to be loyalty. Companies spend a fortune on these and similar programs that do not move the loyalty needle because that is easier than doing what matters.

What matters?

#1 on the list for consumers/customers: product experience. Well how tough is that to fix in most companies? And can marketing actually fix it, assuming they even wanted to try? Probably not because most companies define marketing only as the back-end of marketing (promotions, advertising, digital, social etc) and not the comprehensive role of marketing, which is to align the capabilities of your company with the current and future needs of your customers, which clearly includes customer experience.

What other evidence do we see that this is true? The creation of a Chief Customer Experience Officer that does not report to the CMO.

If you want to create loyal customers create products and services and a ‘doing business’ experience that is uniquely valuable. Buying loyalty doesn’t work. If you’d like to see a tangible difference, look at the loyalty mainstream US supermarkets have (or don’t have) and how much they spend on their loyalty programs. Then look at the loyalty Trader Joe’s has with its customers and how much it spends on its loyalty program. (I’ll save you the trouble, it’s $0 because they don’t have a ‘loyalty program.’ They have the Trader Joe’s experience.)


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How Is This Sign Helpful To Business?

storesignI was visiting an ice cream store in Minneapolis (that’s one of my pastimes) and I walked by a store with this sign out front.

Upon a quick look (the first pass), I assumed it was a junk store and continued on. When I looked in the window while walking back to my car, it did not look like a junk store. I then read the rest of the sign.

I have no idea how this sign helps business. Your thoughts?


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Do Super Bowl Ads Work?

The answer of course depends what you mean by work. As with any activity, including marketing activities, you need to define an expected outcome before embarking on the activity, or how can you know if it was worthwhile. While we can’t know what outcome was expected by any of the Super Bowl advertisers we can note, based on work by YouGov BrandIndex, some outcomes that were achieved.

Based on an article in Advertising Age, purchase intent was not improved for any Super Bowl advertiser. That seems an important outcome, but maybe not. However, buzz and word of mouth did increase for some, as noted in the article.

This seems a trend over several years now that there is no movement in purchase consideration, but they do get people to “talk.” Does “talk” ultimately and eventually lead to purchase? Don’t know, but then I don’t need to know. The brands do, or at least they should.


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Super Disappointment

lombardi_trophyAs earlier posts will show (just use the Super Bowl Ads category), I have become more and more disappointed in the Super Bowl ads each year. This year’s crop mostly sucked. Fortunately the game was epic.

While a few of the advertisers purposefully chose to promote social causes, which if you support them, you probably liked the ad, the rest were advertising and not remotely “super.”

Of all the ads that aired only four, in my opinion, were super enough. Those four in no particular order were:

  1. T-Mobiles two ads that spoofed 50 Shades of Grey
  2. The Avocados from Mexico ad
  3. The Turbo Tax ad
  4. Maybe the Budweiser ad

As prior posts about Super Bowl ads mentioned, I am looking for on-message/position ads that are “big.” After all it is the Super Bowl. (and as many have asked, where were the Clydesdales this year?)

In thinking about why this crop is continuing a worsening trend (and many agree), I postulate that because Super Bowl ads are no longer debuted on the Super Bowl and look to social media for views, things have changed in the mind of the advertiser (but not necessarily the viewer/customer). So the Super Bowl viewer may no longer be the target market, while the Super Bowl may be the attention grabbing vehicle to get these ads viewed elsewhere.

Anyway, the net result was poor in my opinion even though a ton of money was spent.


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Over-Promise and Under-Deliver

My son recently closed on a condominium in Santa Cruz and the closing process reminded me of the difficulties many companies have in delivering on their promise. To be fair I don’t know if the “sales department” over-promised or the operations department is actually a sales prevention process. All I know is that the closing process did not go as smoothly as we would have liked.

The loan officer (the sales department) was working against a promised close date with his operations department to hit the close date. From our perspective the requirements to close kept changing in terms of details, and finally the date moved out a full week. Why? We don’t know, all we know is that we were not happy, but we had a week buffer built into our schedule to prevent a catastrophe from a delayed close.

It then slipped a bit more but did finally close with some last-minute hoop jumping on our side and by the loan officer. The whole process reminded me how out of sync a company’s sales and operations functions can be, thus creating a less than ideal feeling on the part of the customer.

The reasons why they did not meet their promise don’t matter to me as the customer. I was not happy with the process. I am professionally interested and thus wrote this blog post. How are your customers experiencing your service or products? The reasons why the customer is experiencing whatever they are experiencing doesn’t matter to them, though it should matter to you from a continuous improvement perspective. Get sales and operations on the same page and then work to make your service or product best in class.


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Maybe This Explains Some of General Motor’s Issues

Dr. Michael Arena is the Chief Talent Officer at General Motors. He is an expert and authority on talent, and has focused on how to get talent to innovate. He identifies three types of talent involved in the innovation process:

  1. Brokers: These are the people who come up with the new ideas. He correctly notes that while these people generate ideas, that is not enough, as an unimplemented idea is useless.
  2. Energizers: He describes these people as those that generate interest in the idea and advance it in the organization.
  3. Connectors: He describes these people as the ones who get the idea implemented.

As readers may know, we have worked with the Team Dimensions Profile for 20 years as it applies to innovation. Each of the three roles Dr. Arena describes are perfectly aligned with the profile’s ability to identify people’s natural tendency towards a role. The names, as you might expect, are different.

What Dr. Arena calls Brokers are called Creators. What he calls Energizers are called Advancers; and Connectors are referred to as Executors. Unfortunately, Dr. Arena has left out a critical fourth profile and process step in his analogy, which may explain some of GM’s problems.

He left out Refiners. Those people are what we call the “Yes but…” people. The ones who don’t belong in a brainstorming meeting (where people act as if there are no bad ideas), but must be heavily involved in design reviews or similar to make sure the idea has been completely thought out. Refiners are critical and his failure to acknowledge their importance my help explain issues GM has with some (many) of their new products and processes.

If you’d like to read more about Managing for Innovation, download our free white paper.


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Improving Customer Experience

deltaairlineslogoI rarely check luggage so my recent experience may be old news for some of you. It may also not be limited to Delta Airlines, but then again, maybe they are pioneering a valuable customer experience.

I criticize the airlines regularly because I fly a lot and they’re easy targets given their limited to non-existent focus on passengers. When they do a good job, I believe I owe it to them to report it as well, and this one is quite good.

I flew on Delta last week to JFK with my wife and we checked a bag. What a shock when, while sitting on the plane waiting to back away from the gate, I got a text saying that our bag was now actually on the plane. Pretty slick (and I assumed true). When we landed, we got a text telling us that our bag was coming to the bag claim area. We had just picked it up, but still, pretty slick.

Great use of technology and customer focus. Now, at least in SFO, if they could just get bags to baggage claim a little faster….

How are you using information and mobile to improve your customer experience?


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