Customer Experience: Are Reward Programs Creating Loyalty?

Are reward programs really improving loyalty? Have technology, big data and access to it rendered these programs as no longer relevant?

I was at the checkout counter of an office supply store. I don’t buy many office supplies so I visit the store about twice a year. Just before the clerk scans my items he asks if I am a member of their rewards program. Hmmmm…. Am I? I don’t know. I don’t remember. I don’t shop here frequently, so probably not. I answer “No”, but in the back of my mind I think maybe I am a member. If I am, I have no idea where that card is or what my member ID is. I ask the clerk to see if he can find me in the system. I give him about 15 phone numbers – old cell #’s, old office #’s, current address, previous address… and NADA! At this point he asks if I want to sign up. Aaaaahhhh!!

My lizard brain wanted to ask “What are the benefits?” and “Does it make sense for a shopper with my frequency?”. Thankfully, my rational brain took over and stopped me from engaging further. In my wallet I have rewards cards for Panera, Hallmark, Qdoba, Brainfreeze, CatchAir and IHG. I know my member # for Kroger. At home I have numbers for BestBuy, Delta Skymiles, Hilton Honors, American Airlines Advantage, United Airlines Mileage Plus, and Starwood Hotels in my laptop. I have a Groupon app on my phone and iPad. If I make a purchase with American Express, I get cash back points, but if I buy online through Discover, I get even more cash back points.

I can’t keep up with all these programs and memberships… and I why should I? Wouldn’t it make better sense for the business or vendor to know me without me having to manage all this myself? As a consumer, I am wondering why I have to do all the work to prove my loyalty or prove my worthiness of a reward. Really?? In this age of technology and big data, I have to enter into a cumbersome process with every store and restaurant where I shop or eat? Sure, it is fun to fill up the Dunkin Donuts card and get that free dozen donuts after buying 10 dozen, but is that $5 freebie really that important or valuable? From the business perspective, does it really increase sales or loyalty, or has it become another gimmick that consumers see through, but feel they have to participate in so they can get a deal. By the way, after decades of travel, I have NEVER been able to use my airline and hotel rewards – either they expire before I need them or I cannot accumulate the points fast enough or in the quantities required to cash in.

What really makes me feel valued as a customer and, in turn, sparks me to be a loyal customer is simple: KNOW ME. Know what I need from your products and services, and know what I need from a relationship perspective. Know what I value. Know how I want to be treated. If you want to reward me, reward me because I am standing in front of you buying your product or service right now. If I love your products and keep buying them, just know it and appreciate me. If I am entering your store for the first time, know it and reward it. What if an office supply store, rather than having a rewards/loyalty program just made it their marketing campaign that every Wednesday is customer appreciation day and everything is 20% off?

Since it looks like these programs are not going away any time soon, I have a suggestion for another solution. What if someone designed an application which removed the consumer’s headache of tracking and knowing about the programs, helped consumers maximize rewards, and helped businesses show how much “loyalty” they are generating by the “rewards” they give away.

Here is my idea (hey, if this already exists, let me know and I will buy it!) –

Develop an application which automatically senses when I walk into or near a store (or maybe I have to check in) and:

  • Queries a master database of all loyalty programs and “groupons” and finds one for the store I entered or am near.
  • Informs me of a match and gives me an option for signing up and then does the work for me
  • Saves the reward program info on my device and makes it easy to retrieve or provide to the checkout clerk
  • Provides an ad hoc option to enter other loyalty programs for which I am a member
  • Has a maintenance option so I can search for loyalty/reward programs and add them to my app while watching TV at night, waiting in a doctor’s office or having lunch.

Oh, and one last thing: if your business has a rewards/loyalty program and a member makes a purchase using the program, please don’t give the member a receipt that tells him/her to go to a website to complete a survey. Instead push it to him/her via email or phone. Don’t make this your members’ problem!

Let’s watch and see which businesses are brave enough to break free of these programs and start “knowing” their customers because they know it’s the right thing to do.

If you are already innovating without these programs, I am interested in knowing what you are doing.  As a matter of fact, if these programs are successful for your business, do you have any successes to share with the readers and me?  How do you measure it and how has it improved your bottom line?  Together we can raise the bar on customer experience.

Join me on this journey to Customer Experience improvement by subscribing to my blog “Designing The Difference” at https://bassiklife.wordpress.com

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