Don’t Bet On Loyalty. Win it!

This is an example of an article written by Jim Feldman for a publication or newsletter. Jim is an author, keynote speaker and consultant who writes and speaks about Change Management, Customer Service and Innovative Problem Solving. Contact us about using Jim as an author, interview or speaker at 312-527-9111.

As I have mentioned previously, my travel and business takes me to Las Vegas frequently. In fact, more of my speeches seem to take place in Las Vegas because many of my clients hold their meetings there. In addition, we work with many gaming organizations in Las Vegas, so I get to be a customer as well as a supplier.

After being away from Las Vegas for many years, I now approach this marketing and promotion Mecca as an epicenter of learning. Sometimes, I am the teacher, and other times the student. As a student, I watch millions of dollars being spent on obtaining and retaining “players” that are willing to entertain themselves by putting coins in slot machines or playing poker or blackjack.
As a teacher, I focus on solutions that enable business to prosper by retaining their customers, suppliers, and employees. They do it at casinos, by asking the players to sign up for their “player loyalty rewards program,” and reward them with everything from a simple coffee mug, to a private limo driver waiting at the airport, to a butler services suite to front row tickets to the top shows, like Celine Dion, Blue Man Group or Cirque Du Soleil and a five-star gourmet dinner after the show.
I have signed up for every player program I can find, and I can tell you from experience they differ. No, I don’t mean in the rewards. I mean in the thought process.
Take, for example, the Hard Rock Casino. I approached the desk wearing a suit and tie. I was the only person within miles wearing a suit and tie, so I thought I might get “special” treatment. Nope. I was told to fill out the form, wait while the young man took his time chatting with his girlfriend on his cell phone, and then be handed, unceremoniously, a players card. When I asked what I could earn, he pointed to the brochure and the display of collectible pins on the wall. Before I could ask another question, he loudly proclaimed, “NEXT!”
A few weeks later, I found myself at Treasure Island. I could not find the players club sign up area, so I asked the security guard. “Honey, you look like a busy man…and I love your tie,” she said. “Let me fill out the form for you right here. That way you can start to earn points right away. Who knows, you may earn a new tie.”
Wow! What a difference. How do you treat your customers?
Better Change: Turn losers into winners.
Everyone knows that today it is more difficult than ever to get your message across to your target customer. Forget about share of wallet or mind for a moment, it is tough enough just to get them to read or listen. The death of mass marketing has been coming for a long time, but the bet may have been called with the likes of TiVo and iPod. Consumers can now choose not just what they see and hear, but when they see and hear it, as well. And that doesn’t even take into consideration voice mail, email, do-not-call registries and other ways for customers to tune you out.
Yet, a personal touch, a friendly voice still works, doesn’t it? And how about a hand-written note? When was the last time you sent one or, for that matter, received one?
What does this mean to your business? It means that it is now more important than ever to retain your top customers, because the price of bringing in new ones keeps going up and up. It means that developing customer loyalty now might be the most important aspect of your marketing plan.
Who’s more likely to do business with you next week and contribute to the bottom line: Some stranger listening to your advertising, or a frequent customer that’s ready do business with you right now?
The tough question is, How do you get the customer to return? That is the singular goal of great customer service…getting the customer to return repeatedly. And to increase their spending each time.
Welcome to loyalty marketing, where you can segment your audience, speak to your target person-to-person and treat your valuable customers more valuably. In short, marketing that helps you retain your most valuable customers.
Marketing to your best customers isn’t anything new. But a loyalty rewards program can create the type of emotional bond that brings customers back more frequently and encourages higher spending with each visit. (Rational, logical customers might disagree, but they both are traveling right now, so we can’t ask either one.)
Better Change: Merchandise Trumps Discounts
The ultimate goal for casino loyalty is to turn losers at the tables into winners through player rewards. Isn’t it the same with your company? Don’t you want your customers to leave with a good feeling? Don’t you want to give your customers a positive experience for their dollars, so they are ready to return to your business with more dollars next time?
And what do they want in return for their loyalty? It probably will not surprise you that most people say they want cash and discounts. It is true with gaming organizations. Any casino manager loves that response, because the cash goes right back into the machine. Talk about loyalty, right?
Wrong.
That’s short-term thinking. When those players leave their casino, what makes them loyal? What drives them back to the casino? What do they have to show for their experience? The answers: Nothing, nothing and nothing. Doesn’t sound like much of a loyalty program, does it?
According to a survey conducted for American Express – the same survey that said the highest percentages of people want cash and comps – a whopping 54% said they like merchandise. The typical casino has cash and comps covered like an ace in the hole, but do they really want to leave over half of their players out in the cold?
My rule is simple…do not give away what you are selling. Find something of value that enhances the relationship. A bonus pack gives “free goods,” and that means that the customer does not need to purchase more of what you sell. Instead, offer something that helps them use up the goods you sell.
Loyalty, by definition, drives long-term behavior. A discount program drives short-term behavior. You do not need an MBA to know which is better for the health of your business. However, this is where some managers start to get an uneasy feeling: Isn’t merchandise expensive?
Folks in the hospitality industry have an answer that might surprise you. A national hotel chain found that it’s more cost-effective to award their best customers with merchandise than with a free room. You read that right: For a hotel chain, it’s still more cost-efficient to award merchandise than to comp a room.
Do the numbers for your business. Give away cash and a dollar costs you a dollar. But award a $250 MP3 player that costs you $140, and suddenly the dollar your customer sees costs you only 60 cents. Best of all, you are turning a loser into a winner by awarding them with something they will long remember.
The memory life of cash or even a free night fades fast, but an iPOD or camcorder will last for years, and give lots of free, positive word-of-mouth publicity. It is called trophy value. And it turns losers into winners.
More important, they come back for more and more points, so they can earn more and better merchandise rewards. You are driving spending two ways: they are choosing you over the competition, and they are spending more to finish earning their chosen award.
Need some ideas or thoughts how to create a loyalty program? Complete the form at http://www.itcheque.com/program.html and I will be happy to send you a business report called How To Run An Incentive Program.
Looking for a simple reward choice to offer? Try I-Gifts from Elite Corporate Gifts http://www.elitecorporategifts.com/ They offer one of the easiest to use, simplest programs for offering “in demand” gifts with no upfront commitment or large minimums. To get the best pricing, ask for the Feldman price.
Call it bragging rights, call it whatever name you want. Under any name, customers can brag about – or at least rationalize – what they won. It is the best way to drive loyalty in your business. Make sure you have a mix of rewards that will influence every player and make sure that the first experience…the sign up…is personal and rewarding. Then let each individual dictate the terms of his or her loyalty. If they get to build the program, they will like how it looks.
January, 2006

As I have mentioned previously, my travel and business takes me to Las Vegas frequently. In fact, more of my speeches seem to take place in Las Vegas because many of my clients hold their meetings there. In addition, we work with many gaming organizations in Las Vegas, so I get to be a customer as well as a supplier.

After being away from Las Vegas for many years, I now approach this marketing and promotion Mecca as an epicenter of learning. Sometimes, I am the teacher, and other times the student. As a student, I watch millions of dollars being spent on obtaining and retaining “players” that are willing to entertain themselves by putting coins in slot machines or playing poker or blackjack.

As a teacher, I focus on solutions that enable business to prosper by retaining their customers, suppliers, and employees. They do it at casinos, by asking the players to sign up for their “player loyalty rewards program,” and reward them with everything from a simple coffee mug, to a private limo driver waiting at the airport, to a butler services suite to front row tickets to the top shows, like Celine Dion, Blue Man Group or Cirque Du Soleil and a five-star gourmet dinner after the show.

I have signed up for every player program I can find, and I can tell you from experience they differ. No, I don’t mean in the rewards. I mean in the thought process.

Take, for example, the Hard Rock Casino. I approached the desk wearing a suit and tie. I was the only person within miles wearing a suit and tie, so I thought I might get “special” treatment. Nope. I was told to fill out the form, wait while the young man took his time chatting with his girlfriend on his cell phone, and then be handed, unceremoniously, a players card. When I asked what I could earn, he pointed to the brochure and the display of collectible pins on the wall. Before I could ask another question, he loudly proclaimed, “NEXT!”

A few weeks later, I found myself at Treasure Island. I could not find the players club sign up area, so I asked the security guard. “Honey, you look like a busy man…and I love your tie,” she said. “Let me fill out the form for you right here. That way you can start to earn points right away. Who knows, you may earn a new tie.”

Wow! What a difference. How do you treat your customers?

Better Change: Turn losers into winners.

Everyone knows that today it is more difficult than ever to get your message across to your target customer. Forget about share of wallet or mind for a moment, it is tough enough just to get them to read or listen. The death of mass marketing has been coming for a long time, but the bet may have been called with the likes of TiVo and iPod. Consumers can now choose not just what they see and hear, but when they see and hear it, as well. And that doesn’t even take into consideration voice mail, email, do-not-call registries and other ways for customers to tune you out.

Yet, a personal touch, a friendly voice still works, doesn’t it? And how about a hand-written note? When was the last time you sent one or, for that matter, received one?

What does this mean to your business? It means that it is now more important than ever to retain your top customers, because the price of bringing in new ones keeps going up and up. It means that developing customer loyalty now might be the most important aspect of your marketing plan.

Who’s more likely to do business with you next week and contribute to the bottom line: Some stranger listening to your advertising, or a frequent customer that’s ready do business with you right now?

The tough question is, How do you get the customer to return? That is the singular goal of great customer service…getting the customer to return repeatedly. And to increase their spending each time.

Welcome to loyalty marketing, where you can segment your audience, speak to your target person-to-person and treat your valuable customers more valuably. In short, marketing that helps you retain your most valuable customers.

Marketing to your best customers isn’t anything new. But a loyalty rewards program can create the type of emotional bond that brings customers back more frequently and encourages higher spending with each visit. (Rational, logical customers might disagree, but they both are traveling right now, so we can’t ask either one.)

Better Change: Merchandise Trumps Discounts

The ultimate goal for casino loyalty is to turn losers at the tables into winners through player rewards. Isn’t it the same with your company? Don’t you want your customers to leave with a good feeling? Don’t you want to give your customers a positive experience for their dollars, so they are ready to return to your business with more dollars next time?

And what do they want in return for their loyalty? It probably will not surprise you that most people say they want cash and discounts. It is true with gaming organizations. Any casino manager loves that response, because the cash goes right back into the machine. Talk about loyalty, right?

Wrong.

That’s short-term thinking. When those players leave their casino, what makes them loyal? What drives them back to the casino? What do they have to show for their experience? The answers: Nothing, nothing and nothing. Doesn’t sound like much of a loyalty program, does it?

According to a survey conducted for American Express – the same survey that said the highest percentages of people want cash and comps – a whopping 54% said they like merchandise. The typical casino has cash and comps covered like an ace in the hole, but do they really want to leave over half of their players out in the cold?

My rule is simple…do not give away what you are selling. Find something of value that enhances the relationship. A bonus pack gives “free goods,” and that means that the customer does not need to purchase more of what you sell. Instead, offer something that helps them use up the goods you sell.

Loyalty, by definition, drives long-term behavior. A discount program drives short-term behavior. You do not need an MBA to know which is better for the health of your business. However, this is where some managers start to get an uneasy feeling: Isn’t merchandise expensive?

Folks in the hospitality industry have an answer that might surprise you. A national hotel chain found that it’s more cost-effective to award their best customers with merchandise than with a free room. You read that right: For a hotel chain, it’s still more cost-efficient to award merchandise than to comp a room.

Do the numbers for your business. Give away cash and a dollar costs you a dollar. But award a $250 MP3 player that costs you $140, and suddenly the dollar your customer sees costs you only 60 cents. Best of all, you are turning a loser into a winner by awarding them with something they will long remember.

The memory life of cash or even a free night fades fast, but an iPOD or camcorder will last for years, and give lots of free, positive word-of-mouth publicity. It is called trophy value. And it turns losers into winners.

More important, they come back for more and more points, so they can earn more and better merchandise rewards. You are driving spending two ways: they are choosing you over the competition, and they are spending more to finish earning their chosen award.

Need some ideas or thoughts how to create a loyalty program? Complete the form at http://www.itcheque.com/program.html and I will be happy to send you a business report called How To Run An Incentive Program.

Looking for a simple reward choice to offer? Try I-Gifts from Elite Corporate Gifts http://www.elitecorporategifts.com/ They offer one of the easiest to use, simplest programs for offering “in demand” gifts with no upfront commitment or large minimums. To get the best pricing, ask for the Feldman price.

Call it bragging rights, call it whatever name you want. Under any name, customers can brag about – or at least rationalize – what they won. It is the best way to drive loyalty in your business. Make sure you have a mix of rewards that will influence every player and make sure that the first experience…the sign up…is personal and rewarding. Then let each individual dictate the terms of his or her loyalty. If they get to build the program, they will like how it looks.

 

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