I recently read a user story about how Harlequin—the publisher of romance novels—keeps its customers loyal. I don’t usually give a plug to a company like this but for what it’s worth, Stellar Loyalty provides technology to make loyalty happen. What’s interesting to me is how many of the ideas in my current book (“You Can’t Buy Customer Loyalty…” (I know another plug)) get put to good use by this publisher. The things that I think work really well include emphasizing a consciousness of customer loyalty, keeping things simple, and focusing on personalizing relationships and engagement.
Consciousness is relatively easy, but someone high in the org chart has to be willing to say, “This is important.” Other things might be important to this publisher too, like finding good writers and editors, but that’s in a separate realm. In the customer realm being conscious of working to maintain relationships is about as important as it gets because it becomes the animating principle for everything else.
I had always assumed a consciousness of maintaining customer loyalty and that works for me because it’s already my primary focus, but for lots of people in organizations that’s not true. People have jobs with concrete deliverables and expectations and unfortunately there aren’t typically metrics for individual customer loyalty promotion. It’s something the organization has to do together and as individuals so starting with consciousness is really a pretty smart idea because it leaves less to chance.
Simplicity is another big idea that comes from other research. Customers—you and I—have a lot on our plates and don’t always want or need a vendor’s extravagant display of affection to make us know we’re loved. What we crave is time and that boils down to simple processes and systems that we can get through on the march through the daily bucket list. In Harlequin’s case simplicity means having a mobile app that enables customers to scan receipts to notify the loyalty program of a purchase so that rewards points can be automatically tallied. Giving points for this activity is important to the publisher because it gives them insight into who is buying what and where and if you’re selling books, that’s pretty important. This also provides the data that enables personalization at a meaningful level.
More importantly though, Harlequin places equal emphasis on the ways customers reach out to them. You can’t ask for a better sign of customer loyalty than when a customer engages online such as by writing reviews or engaging on the company’s Facebook page or by answering a survey. This is the engagement that any company would want because more than a business’s outreach to customers (which can be ignored) this identifies things that customers reach out for.
Finally, Harlequin analyzes all of the customer data that it collects which helps it to both identify customer moments of truth and how well it is performing in them. That’s how you build constant improvement into a loyalty program—knowing what customers care about and then ensuring that’s where your people and automation focus.
Consider some of the metrics that the publisher shared in the use story,
- Percent of customers that engage with the loyalty program monthly and the direction of the trend.
- Percent of customers who redeem rewards and percent who have redeemed multiple times.
- Percent of members providing feedback and percentage that’s positive (much more useful than a Net Promoter Score).
- Time in the loyalty program and propensity to repurchase.
This isn’t hard to do and almost any company could benefit from a program like this with a few well-chosen metrics like these. My studies show that companies are increasingly moving in this direction and away from simply awarding points based on purchase transactions. The simple reason for the movement is that it takes much more than points to keep customers in the fold and more than simple transactions to diagnose vendor health.
That’s why loyalty programs are taking on greater prominence but not just any loyalty programs. Modern loyalty is based on customer engagement and understanding moments of truth so that vendors can be there when customers need them. If you’re wondering about your loyalty program, this is an approach to get you thinking different.
(Cross-posted @ Beagle Research Group)