Halloween horror: The customer loyalty scheme that ate sanity
For someone running a retail business, a customer loyalty scheme should do four things: Build brand awareness, encourage loyalty, provide insights into customer behaviour, and save time.
If poorly implemented though, they can be a horror show for a business owner. Huge amounts of time, budget and energy squandered without delivering any value. We have such a story, a tale of a man driven mad by a scheme of his own creation.
The following is true…
Pumpkins never last
John had been running his fresh widget shop for two years and the situation appeared idyllic. He had customers, he knew them well, and he played an active role in the local community.
He knew it never paid to be complacent in retail and in his daydreams, he saw himself developing a small empire of widget shops across the region, building on his reputation for exceptional customer service, great products and competitive prices.
Sitting in the barber’s chair one day, he glanced in the mirror and watched a customer pay using a loyalty card. It was a simple, everyday transaction but it planted a seed in his mind.
Terrified, the mirror showed him his own reflection
Over the next few days, he surveyed his customers about loyalty cards and whether they’d like them. Most thought it would be a great idea, so he developed a plan.
He hammered out a strategy, hired a local design agency for the cards, and started fantasising about the mountain of data he was going to work with. He designed spreadsheets for collecting and collating data and put enormous time into developing reports to fit the insights he anticipated.
John had no idea all along he was building a prison for himself.
It was a blustery, foreboding autumn morning when he launched the scheme. In the main his customers were happy with their loyalty cards, but the first sign of the trauma to come was several people turning them down. Some intimated they probably wouldn’t come to the shop often enough to make it worthwhile, and others replied with grotesquely bloated wallets already straining to contain cards from coffee shops, supermarkets and petrol stations.
Scarier still were the semi-regulars who took a loyalty card and forgot it the next time they came in. These elusive customers were the ones John wanted to target most, so he could use evidence of their habits to turn them from occasional to regular customers, but they defied his every effort and as John chased their shadows he drove himself closer to the edge of sanity.
Living dead loyalty cards
John couldn’t get the meaningful insights he’d hoped for from his loyalty cards, and the weight of his investment grew behind him like a spectre, haunting his every hour.
His data baited him with great volumes of pointless information, showing him over and over what he already knew: Loyal customers regularly shopped at his store. Dishevelled and desperate he stared at the void long into the night while his spreadsheet openly defied him, mockingly and gleefully displaying useless content.
After a few months John was gripped with madness, sensing his effort, time and money spiralling into an abyss. The harder he tried to claw back his investment the faster it seemed to slip away, dragging him further into the mouth of madness as his effort and losses compounded. He clawed at the walls for answers and relief, but nothing was forthcoming.
Eventually John acted, once and for all, to free his mind from the torment he’d designed for himself. In the black of night, where no one could bear witness, he took an axe to his customer loyalty scheme and never spoke its name again.
On cold, still nights John almost thinks he can hear a stifled scream coming from the bottom of his garden but dismisses the thought and climbs the stairs to bed, knowing better than to open his mind again to such chaos.
What could have happened
Loyalty cards can bring a lot of benefits to a business, but their development and implementation can also soak up a lot of time and resources. There’s a risk the insights you gain may not actually be all that insightful either if the majority of participation comes from already very loyal customers.
Equally, times are changing. Ten years ago, if you forgot your wallet when you went out, you were out of luck unless you went back for it. These days it’s less of a problem with increasing numbers of us using our phones or watches to pay for goods and services. As it becomes easier to pay without wallets, it’s more likely to leave our loyalty cards at home.
So have customer loyalty schemes had their day? Not in the slightest. Technology has evolved to a point where specialist organisations can quickly and easily deliver a flexible, cost-effective, fully branded loyalty platform that can be fully integrated with existing systems.
By implementing and personalising an existing system from a specialist provider, your customers will also be able to benefit from their loyalty points even when they don’t have their wallets, and if you choose to be part of a wider scheme they won’t be weighed down by a volume of cards.
The reports these systems generate can be extensively personalised, so you can get to the insights you need quickly, and with an expert team you reduce the risk of simply generating data for the sake of data.
With the competition from the high street and online ramping up, it’s never been more important to understand your customers and make sure what you offer is tailored to their wants and needs. It’s vital you don’t waste time and budget trying to develop something that doesn’t deliver what you need.
Bringing in loyalty technology and tweaking it to your specific needs can help you build your business efficiently and cost-effectively without distracting you unduly from your primary task: Serving your customers.