On Building Loyal Customer Relationships

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On Building Loyal Customer Relationships

Loyalty and Data Privacy – What? Me Worry?

As an online marketer, I am very intrigued by the technological ability to gather so much information about buyer segments, loyalty marketing and customer relationship management. While I am concerned about privacy and the overwhelming nature of the NSA data-collection happening among our own citizens, I am simply amazed by the notion of knowing so much about a customer’s behavior and how to best cater to them.
I tend to get so intrigued that I forget how much technology has changed us in just a few years. That’s where my friend Butch comes in. Butch is a really good friend of mine who is generally anti-technology. It’s not because he’s afraid of it or doesn’t understand it, it’s that he knows and understands it so well that he chooses to stay away from it. It’s in conversations with Butch that I get new perspectives on customer loyalty and information.

Schooled on Loyalty

Loyalty? Or Incentives?

Loyalty? Or data collection?

As a joke, one of Butch’s friends put a loyalty rewards card for a gas station on his keyring. As Butch went into the gas station to pay for his gas, the attendant asked to scan his loyalty card, which Butch had not noticed until that point (I would have loved to see his reaction!). Butch realized what had happened and explained that it was not his loyalty card, but belonged someone else. The attendant still asked to scan the card, and Butch refused. He just wanted to pay for his gas and coffee and be on his way. The attendant fumbled at a response, not understanding why someone wouldn’t want their loyalty card scanned.  As I understand it, the conversation went like this:

Attendant: “Why don’t you want your card scanned?”

Butch: “I don’t use cards – It’s not mine”

Attendant: “But if you use a card, you get discounts and free cups of coffee”

Butch:  “That’s the thing. I used to come get gas here all of the time, and in those days that I would get free coffee because I was a loyal customer – You knew who I was.  Now that free coffee isn’t free because every time you scan that card, you take my information from me  – for free.  I pay for that coffee with my information.”

Attendant: “…”

A Lesson on Loyalty

My father always enjoyed visiting the corner restaurant in town, and they never charged him for his coffee. He was a regular and had become good friends with the owner and waitresses over the years. They appreciated his business and his company, so they never charged him for coffee. It was free, and a gesture of a true relationship based on mutual appreciation.
Today, loyalty is defined as a relationship where the retailer offers discounts and sales to regular customers. In exchange, those customers provide extensive amounts of data that enable a company to sell to them more effectively and develop patterns of behavior. We give our locations, sales data, address, phone number, demographic data, dates, times and interactions between online and offline behavior all to enable the retailer to sell to us more and more effectively.
What was once a relationship of mutual appreciation has now become a transaction – not of loyalty but of mutual ambition. We want what we can get from each other.

Loyalty Marketing

Now don’t get me wrong, pining for the “good old days” is not the point of this article. Rather, those stories are good in the respect that it keeps me grounded on the purpose of taking care of the customer, and making sure that loyalty is appreciated – even if there is no data transaction involved.
How much of your loyalty marketing is involved with a data transaction? Does your marketing show an emphasis on the transaction or on the customer?
It wouldn’t hurt to consider showing appreciation simply because your customer believes in you and continues to buy into your brand and products/services.

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About the Author:

Matt has taught Google employees how to understand and use Google Analytics, consulted with Experian on how to present data, developed online marketing training for both Proctor and Gamble and Johnson & Johnson and presented analytics methodologies to Disney, ABC & ESPN. As founder of SiteLogic, Matt teaches marketers how to create measurable and profitable strategic marketing plans.

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