It’s not about points or free gifts anymore; it’s about what money can’t buy.
This is what Praveen Sharma, VP of loyalty for United Airlines, tells me about what it takes to keep customers loyal to brands in an age where consumers have more power and options than ever before.
MileagePlus, one of the airline industry’s most successful loyalty programs, is built around creating customer experiences — not just free flights, like most frequent flyer programs. According to Sharma, these experiences can include a training day with your favorite pro sports team, or a session in a flight simulator, VIP luxury venues and other experiences that are not for “sale.”
By allowing MileagePlus members to use their points for aspirational experiences that deliver emotional fulfillment vs. just a free airline ticket or upgrade to First Class, United Airlines’ customers remain loyal to a brand, regardless of price. As a result of rewarding customers in unexpected ways, and by allowing members to choose their rewards, MileagePlus is the largest loyalty program in the industry, with more than 100 million members.
So what’s in your loyalty program? Chances are, you’re still offering one free product for every 10 purchased, or points redeemable for a free hotel night, for 10 percent off their next purchase of $200 (not a big deal by the way), and other way-too-common ways for rewarding customers.
Loyalty today is not about price. It’s not about “free” anything. As United Airlines has discovered and proven under Sharma’s leadership and dedication to providing emotional value over monetary value, it’s about the “feelings” you create among the customers you serve. Feelings come from how you are treated, unexpectedly and expectedly.
For example, a friend of mine flies United almost weekly, all over the world for his business. When he had a tight connection at a large airport with terminals far apart, there was a car waiting for him at his gate, ready to take him to the next gate. That kind of attention to individual customers’ issues and acting on imminent needs is what creates brands like United Airlines that last not only for a customers’ lifetime, but for generations of customers over decades of change.
No matter how large or small your brand may be, there are many lessons here for every business for creating loyalty programs that enable your sales, profits and marketing ROI to soar to new heights.
Here’s just a few tips from Sharma and myself:
- Build an Ecosystem: Build a network of partner brands that reflect your brand’s standards and value, and complement or support your offerings. Align with brands that can provide experiences for your customers beyond your product line, that offer supplemental experiences, services and products, and are as eager as you are to reward each others’ customers with new offerings and ideas.
- Build Your Data Capabilities for learning and communicating instantly across all channels your customers use: mobile, phone, email, social. Communicate on what matters to customers, not just what matters to you.
- Use the Rule of Five to send tips, ideas, informational notices, updates on services, products or, in the case of United, changed gates or ETAs. Send five messages about the customer before you send one message about what you have to sell.
- Create Points of Engagement that enable you to learn. Surveys still work, but so do other tools. Consider creating a loyalty board with a diverse mix of customers to learn firsthand what you need to do to keep loyalty up and growing via evangelism. And insert a one-question survey each week on your website to keep the dialogue and insights flowing.
- Never Set the Loyalty Trap. Some companies and business models wittingly and unwittingly “trap” customer loyalty with sales models that make it really hard to switch brands. SaaS contracts are an example of how this can happen, because of the upfront time and energy required for most subscription-based services. Once you get clients set up to use your product, trained and “vested” with time and money, it is hard for them to cancel that contract, even though you’ve given them many outs, because they will lose too much time and money to start over. However, these traps, when set intentionally, rarely work. If your onboarding, product functionality, service, support and other aspects do not meet expectations and trigger satisfaction more often than not, customers will make the effort to change and will tell everyone they know to go with them.
- Reward Loyalty With Experiences, not just product. Consumers define a brand’s value to them by the experience and emotional value delivered more than anything else. Price and customer service can be replicated quickly and easily by just about any competitor. But experiences and feelings of achievement, appreciation, joy and security, not so much. This is why MileagePlus offers experiences of a lifetime that money can’t buy; like the training day with a professional sports team or flight simulator sessions mentioned above.
No matter how big or small your business reach, or how large your customer database is, you can define and deploy strategies and experiences to create loyalty. Think big, think differently, and think about the “emotionally rewarding” value that your brand is uniquely set up to deliver — time and time again.