How many customer loyalty programs do you,
personally, belong to? In 2015, according to the Colloquy Loyalty Census, U.S. consumers
held 3.3 billion memberships. The average American household was registered in 29 loyalty programs spread among retail, financial
services, travel, restaurants, and various other economic sectors!
Companies will explain that it’s
important to ‘play the game’ because they know how much more expensive it is to acquire a new customer than it
is to keep an existing one. Further they’ll quote chapter and verse documenting how customers who are points-program
members account for 3, 7 or even 10 times more hotel stays or how members purchase 20% to 90% more than non-member customers.
But Have the Programs Changed Customer Behavior?
We take the position that most of these “loyalty” points-programs aren’t really accomplishing
what they should or could be. Seldom, if ever, do the organizations running them conduct objective research that would
conclusively tell them whether the programs are actuallychanging customer behavior, or whether instead
the spending’s a self-fulfilled prophecy. Meaning the customers who are already buying more are the ones who find
joining programs more worthwhile.
Further, we have to question whether the points-programs create a level
of entitlement (often leading to a sense of unfulfilled promises and unmet expectations). At best, we wonder whether
most programs are simply binding customers to brands through a form of “golden handcuffs”.
Real Keys to Business Success
Despite the programs currently out there, we believe that
what most smart marketers and managers actually want are:
- Satisfied/delighted customers who keep coming back.
- Raving fans who generate positive word of mouth and brag
to their friends, relatives, neighbors, co-workers, and even strangers about a brand.
- Trusting supporters who are ready and willing to try new spin-off products
Chick-fil-A Thinks Differently
has achieved amazing levels of customer satisfaction and sales without a traditional loyalty points program. Instead,
in 2013, the chain created its own customer recognition program, the A-List Program. Customers
cannot sign-up for membership – it’s open by invitation only. (Most customers don't even know it exists!)
About 60% of locations now participate in the program which begins with local management identifying individuals they have
come to recognize as frequent customers (and often know by name). Those individuals are personally handed a written invitation.
They then go online and complete a membership form providing their name, email address, date of birth, and other information
such as their favorite sports team, etc..
Instead of Points...Unexpected Delights
Once registered, member customers begin
to receive customized rewards and communications from their local Chick-fil-A restaurant. Activities are completely under the control of the local manager and can
range from A-List member group dinners in the restaurant, to tours of the kitchen, to participation in a neighborhood cleanup,
or serving as an informal board of directors offering advice to the local franchisee. While corporate does offer suggestions,
programs are totally controlled at the local level. Invitations can be offered to anywhere from a handful of customers
at some locations to hundreds of recognized loyal customers at another.
We don’t have
access to program measurement. What we do know is that
from a single store the program’s voluntary participation by franchisees
grown to over half of the chain’s 2,000 restaurants in less than four years. We
have heard the enthusiasm with which corporate management
A-List Program. We see the continued growth in sales. We hear the voices of
And that sounds like success to us