Most Customer Loyalty Programs Are Bogus!

Most customer loyalty programs out there are more a waste of time and money than they are an affective way to create “customer loyalty”.

I’m just a regular guy and I  am signed up for a number of these programs. I let them sign me up so I don’t have to hear the pitch if I return to the store. Am I loyal to those businesses? Not really. The programs are too complicated and they don’t really give me enough to retain my loyalty. If I see it that way, how many others out there think the same way. My guess is A LOT!

It’s hardly worth my effort to pull my wallet out to get at the card they issue to me. A $5.00 coupon or an extra 10% discount after spending “x” dollars, or 25 billion miles flown to get a ticket with 25 billion restrictions, isn’t going to make me loyal… period! It’s just a nuisance to me. And there is the operative word. Nuisance! If that is what you create for me, how does your customer loyalty program really measure up on the “customer service scale”?

So, how should a customer loyalty program work that is simple and fair to every customer and creates customers that really return to do business with you?

  1. Every single customer gets exactly the same deal.
  2. Membership is FREE.
  3. The customer gets FREE merchandise or service when they meet the criteria.
  4. Absolutely no hoops to jump through to cash in.
  5. Customer belongs to the program forever… time limit.
  6. Customer can transfer their membership to someone else.
  7. If you end the program, you offer every member a prorated credit for the purchases they made.
  8. Customer gets credit based on the number of purchases made and their value;  not based on dollars spent.

How do I know if the above will really create loyal customers? We did it in our business for over 30 years and it worked perfectly. I’ve never seen or been offered a customer loyalty program that even approaches the simplicity, fairness, and effectiveness of the one we implemented in our stores based on the above principles.

In my next post, I’ll explain in more detail WHY the above principles are the only way to implement an effective customer loyalty policy based on purchases.

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