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Earlier this year, Marriott International, Hilton, InterContinental Hotels Group, Starwood and Delta – among others – effectively devalued their customer loyalty programs. They now require more points, and sometimes more cash, in order to obtain a reward room.
As a result, customers have reacted negatively. Surprised?
Consumers view loyalty rewards as ‘bought’ or ‘earned.’ Certainly, not a reward. And, companies are increasingly analyzing the return on such programs and determining the investment is not there. So, they reduce the benefits and their customers become more disenfranchised. Exactly the opposite reaction desired of a ‘reward.’
Zealotry Marketing flips the concept of loyalty. Instead of discounts or rewards following frequent purchases, consider the benefits of engaging the consumer in more collaborative, meaningful and personalized ways that enrich their experience and deepen their understanding of your brand. Examples? Tastings; behind the scenes tours; exclusive seminars/discussions; advance previews; sampling; private communities.
Savvy media types have long understood the value of “advance staging” – of cultivating a smaller, but fervent group to ‘leak news’ and be positive ‘plants in the audience.’
Delight your Zealots in advance, instead of trying to buy their continued loyalty. The investment is less and the return is greater.
Most people have a built-in “radar” to detect how someone feels towards them. Seemingly insignificant words or gestures can have a large impact. For example, with a return policy based on the goal of minimizing fraud, customers will emotionally detect that they are not trusted. Conversely, if the company’s underlying assumption is that customers are honest and fair – and that when they need to return something they have a genuine problem – then their policy will make customers feel cared for and valued.
A research study recently published in the Journal of Marketing reflects the longer-term financial impact of return policies. And it’s not good for those strict policies. Customers who paid for the return of a defective or unwanted items decreased subsequent spending at that retailer by 75 – 100%. On the other hand, retailers who offered free returns to their customers saw subsequent spending by those customers at 158% – 457% of pre-return levels.
Short-term actions have long-term consequences to your Zealots. Zealotry actions should demonstrate ongoing “appreciation” to customers.
Julie Schlack of Communispace says it well: “True loyalty exists when a company has made its customers feel safe, appreciated and smart. These emotions are the anchors that will keep your customers close whenever the next guy comes along with a better deal.”
Guest Relations Marketing has long advocated a more personal, authentic and cost effective approach to igniting your “Zealots.” Coming in January, we will be launching a program that any company can implement. An authentic alternative to traditional loyalty programs. One that builds loyalty the right way. Stay tuned for ZealStorm. Get ready to ignite your Zealots in 2013!
A year ago, childhood cancer was a totally foreign subject to me. The disease hadn’t affected my family or friends. It didn’t have a face or a name. It wasn’t real.
Then I met CURE’s Kids.
I began my internship at Guest Relations Marketing in August 2011 and my first project was to read, edit, and upload the stories of the children participating in the September promotion CURE’s Kids Conquer Cancer One Day at a Time.
Some children were survivors. Some were currently in treatment. Some had lost their battle. The stories were both heartbreaking and inspiring. After researching CURE, I soon realized that childhood cancer is much more common than I ever imagined and that government funding for the disease is almost nonexistent.
Since its inception in 2009, CURE’s Kids Conquer Cancer One Day at a Time has raised more than $600,000 for critical research aimed at finding cures for childhood cancers. All this was accomplished by simply sharing the stories of children whose lives have been affected by this horrific disease.
CURE’s goal this September is to raise another $250,000. Seems like a daunting task. But as soon as you read the story of a child like Laura, the reason CURE needs our support is crystal clear.
Are you a Zealot for CURE? I certainly am.
- who are the parents (or founders of a company)
- what was the environment and influences
- what has been said and written from the leader (or CEO)
- where is the priorities in money and hiring being placed
Discover the basis behind those questions and you are well on your way to a smartly constructed brand platform.
A recent survey by hotels.com noted that for more than 80% of respondents, free Wi-Fi in-room is a make-or-break decision for online bookings. Surprised? Shouldn’t be. Free Wi-Fi is now becoming ubiquitous. As it is offered in one location, consumers don’t understand why it is not available – for free – in another spot.
How does this impact hotels? Well, it is one of those somewhat hidden add-on charges. An additional profit center. And, for major chains, it is a major hit to their bottom line to decide to remove a daily $10 charge from thousands of rooms in hundreds of locations.
But, from a consumer perspective, it has become a given that a certain level of establishment, or hotel, offers complimentary Wi-Fi. Why pay $10 a day at the hotel I’m paying to stay at, when I can walk next door to the diner or Starbucks and get the Internet for free? It is a component of the overall experience.
The Zealotry Marketing lesson? Value is not a fixed position or asset. The marketplace, consumers’ needs, and competition all change. Thus, it makes sense that value points of a business would also change. Logical and simple enough. But, how often is your product, operational delivery, or marketing program significantly examined and adjusted on the basis of aligning with what is perceived as value today?
In this example, the solution is simple. Guests want Wi-Fi for free. Or really, what they are saying is that it is a fundamental need. Not an “add-on.” Hotels need to drop the add-on fee. The cost is a part of the room rate and a part of doing business.
Value is transparent. Now it’s time to figure out how to package and market it.
Ron Johnson, the CEO of JCPenney, understands branding and the value it represents. The following article is worthy on its own, but three key takeaways:
1. Creativity – looking at the business differently – is the starting point of success.
2. Experience is the core issue – not product.
3. Develop a mission that you and your staff will believe in.
From The Hub magazine:
“Improvement merely lets you hit your numbers … Creativity is what transforms,” says JCPenney ceo Ron Johnson in a Fortune profile by Jennifer Reingold (3/19/12). That was the main lesson Ron says he learned while he was at Target, after gambling on introducing Michael Graves designer products in a big way. “The math was simple,” says Ron. “If I didn’t sell one piece but people looked differently at the other 96% of products we’d win. It’s always about mind share, not market share.” Ron is now bringing a similar sensibility — which of course he also brought to Apple stores — to JCPenney.
The essential vision, once again, is to create “a place where the experience (is) as important as the products themselves.” This apparently was more Ron’s vision at Apple stores than it was Steve Jobs’s. “He said it’d be a store for creative professionals,” says Ron. “I said, ‘Well, then I’m not coming. If you want it to be a store for all Americans, sign me up.” Ron also “persuaded Jobs to nix commissions for salespeople, arguing that they should give customers the best advice, not the advice that earns them the most.” Ron says, “You can motivate by a mission or motivate by money… the mission will work.”
It certainly worked at Apple stores, where sales per square foot average $6,000. But will it work at JCPenney, where sales per square foot are currently $146 and the shopping experience is a safe distance from either Apple or Target? Fitch, the ratings agency, has “downgraded the company’s debt to junk level,” based on Ron’s strategy, the core of which is a “return to the company’s original values,” espoused by founder James Cash Penney as a “morally upright place.” Ron Johnson, eternally an optimist, says his plan will work. “What you can’t do is chicken out,” he says. “If you had looked at the data on the Genius Bar after a year and a half, we should have taken it out of the store… There’s no reason to sell an idea short. The only risk would be to not fulfill the dream.”
From the continuing series, What is Zealotry Marketing
Guest Relations Marketing has become known for three things: Zealotry Marketing; brand restage; social media programs. These seemingly unconnected concepts actually connect nicely for successful brands.
Almost always, the starting point with a prospect introduction or a new client is one of two things: either they have a fundamental change in the business (new product line; acquisition; new sales territory) or sales have stagnated.
Either way, the discussion always leads back one of target definition. The root issue is always about identifying and accurately defining the correct target. In our worldview, Zealots are the top priority for targeting any change in marketing approach. Why? They are already receptive and a fervent supporter of the brand. It is logical (and empirical) that they are going to be most likely to embrace any new direction or offering. And, they have a track record of helping get the word out – create organic referral.
Typically, in aligning messaging and core value points against referral, it becomes apparent that some partial or full brand restage needs to take place. Thus, the connection of “Zealotry Marketing” with brand restage – the need to get messaging right and consistent to leverage the impact of your most passionate followers – your Zealots!
Social media? It is where the Zealots play. Social Media is the media of referral.
Zealots = long-term brand profitability.
Brand restage = alignment to Zealotry messaging and values.
Social media = Zealotry (referral) media.
Next issue – we expose the myth of social media.