Strategy and execution. Consider them your loyalty plan’s siamese twins.
Neither thrives without the other.
Just this week, I’ve had calls from two corporations selling costly products and services their customer base only buys sporadically. From an internationally syndicated residential real estate brokerage to an auto manufacturer, these firms were hungry for help on keeping their established customer base primed for referral and repeat purchase. Their strategy was simple: build goodwill through customer “touch” between major purchases, so when the time is right for a big, new purchase, the sale is won. But, as we agreed, it’s the execution of the strategy that makes or breaks the loyalty outcome. Here’s proof:
After days at home nursing a cold, I am running at breakneck speed to get a week’s worth of errands completed in one afternoon. For the last two weeks, my hardwood floors had remained un-mopped because I was out of the refinisher’s recommended cleaner. Several years back, Mack and I paid top dollar for our city’s premier refinisher to restore our oak floors. Delighted with the refinisher’s work, we’d been treating our golden oldies with meticulous, loving care ever since. Nothing but the refinisher’s recommended cleaner would do. So off I go to my refinisher’s store to pick up more bottles.
I walk in and request the cleaner from the woman behind the counter. “Here’s the last two bottles” she says adding that they would be ordering more. “How much?” I ask. “Ten dollars” she says and I silently congratulate myself for having first stopped by an ATM and gotten the appropriate cash. “Here’s a 20,” I say and her face falls. “I don’t have change” she declares. I dig deeper into my purse and this time I find eight one dollar bills. “It’s all I have,” I say. “You don’t have a check?” comes the retort. “Nope,” I say, “just the cash.”
At this point we’re dead-locked. We stand, alone, in this quiet store, no supervisor or co-worker in sight, and I’m thinking, “Why should I leave and go get change? Aren’t I the customer?” She’s saying to herself, “Rules are rules. My job is to collect the $10.” I take the plunge and ask, “Are you really going to let me walk away for $2?” thinking all the time about the mucho dollars we paid this firm a few years back for refinishing work and the numerous friends Mack and I referred since. Surely, we’re worth $2 to this business. But she has different thoughts. She raises her arms in a I-give-up-type stance and screams out in a shrill, disgusted tone, “OKAY, I”LL PAY FOR IT MYSELF.” Startled at the outburst and feeling grateful there is a counter separating us, I handover my $8, collect my two bottles of cleaner and quickly exit.
Loyalty Fallout: That three minute encounter was all it took for me to go home, Google the cleaner and order multiple bottles for delivery by mail. But that’s not all… A few weeks later, Mack and I began discussions with a remodeler about plans to upgrade our master bedroom suite. Carpet would come up and wood floors would be put down. When asked whether we had a preferred wood floor installer, my immediate answer to the remodeler was a resounding “No! You make the recommendation.”
Loyalty Lesson: When developing your loyalty plan, think long and hard about frontline execution. A smart strategy for keeping customers primed for repurchase and referral is obviously essential, but faulty frontline execution is more often where the bite is. It’s how you keep a $2 shortage of change from destroying thousands of dollars in future business.