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Transform Your Loyalty Program From Bank to Park

Posted by Michael Leis on February 25th, 2011 at 3:47 am

There are a lot of discussions going on about how to create loyalty in a world where the next best offer is a click away. Should we change the cadence or targeting or content of our emails? How can we add badges? Do we need a redesign?

Then, towards the end of the year, it hit me. I fell just a few flights short of getting status on United. So what was the point of taking all those flights on United? Giving one brand my loyalty throughout the year ended like a reverse jackpot. It’s incredibly disappointing and de-motivating to come up empty on recognition for that level of investment.

This all-or-none loyalty framework certainly isn’t unique to United. Many loyalty programs demand you save up points for long periods before they give you any token of preference or thanks. Until then it’s a steady parade of confirmation and survey emails, the latter again asking for me to fill out a form in the hope of winning a ton of points.

So why are loyalty programs turning more people off than on?

Christmas Clubs are Dead

Thinking about how all of these loyalty programs work, I wondered when they started. Very unscientifically, it feels like they came into being during the 1980’s (or that was the first time I remember them). This was in the last decade that Christmas Clubs were popular. And Christmas Clubs depended on an American culture that values putting a little bit in every week to enjoy something big, like a vacation or a big Christmas at the end of a long wait.

But our culture doesn’t work like this anymore. My colleague John Kenny likes to quote a statistic where, as a nation, we like to gamble about 20 billion dollars more than we save each year. We don’t want to defer gratification. We want an immediate result. Micro-lending is on the rise, and layaway is making a big comeback. These are both very focused and shorter-term investment or redemption schemes.

Make the Park Instead

Surely, no loyalty manager wants to think that their program tiers are only encouraging brand use among people who are already in its core, and discouraging anyone who is in the beginning of their relationship with that brand.

To achieve this conversion, I think it’s useful to use the park or central town square metaphor Dennis Schleicher introduced me to a while back. You want people to come into your square and make it a frequent destination: for hanging out, for the people that you meet there, or just go to watch.

But think about what makes a public park that people love: all the little things: the playground, the fountains and benches, the landscaping, the location, the bands or movies you invite to play there. And the ultimate test of the public space, as Dennis rightly suggested: that you see the occasional couple kissing.

In an era where we see Tripit, Mint, and Kayak make real ripples through industries by giving users something visual and valuable with every deposit of people’s time and effort, loyalty programs have the opportunity to become popular parks again with feedback and recognition at every point in the relationship.

To make a place so comfortable that you could even facilitate private moments that matter. Like Twitter’s Direct Messages, or Facebook private messaging and groups. These are the information equivalent of a couple kissing as they walk through, or sitting on a bench off to the side.

If loyalty doesn’t move more towards the model of making a pleasing community space that rewards and recognizes with every step, the “young audience not adopting” today will be the long lost brand equity of tomorrow.

What do you think? Please add your perspective here in the comments or @mleis.

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