The biggest and thorniest problem with loyalty programs is that customers flock to them. Companies seem to be either flummoxed or flailing as they confront the resulting contingent liability.
I am writing this sitting on an airplane, and that is the proper analogy. Airlines’ frequent flier programs were created, ostensibly, to engender loyalty and to reward their best customers (frequent fliers) with value—“free” airfare. Unfortunately, it worked. Who knew?
So I consolidated my travel onto one airline. I got their credit card and played that game and now I sport the dubious honor of being in their million-mile club. My family and I enjoyed many vacations as a result.
Now I can get a lot with my frequent flier miles—magazines and merchandise—but redeeming my points for travel is increasingly hard. If I am a paying customer, I get perks. If I want to fly on them, it’s close to theft of services. It used to be that there were seats in front earmarked for frequent fliers. The last several times I’ve been able to redeem points, I sat in the back between the bathroom and the engine.
The root cause is short-term metrics. All we care about is what we sold today. Long term, loyal customers are nice, but please don’t get in the way of us selling seats today.
Should I be grateful for whatever I got? Sure. Did it come with respect for the million miles I paid for? No.
Our best customers are the most profitable, stay the longest (which means we have amortized the cost of acquisition) and buy the most. But those are long-term metrics.
So what’s your solution to this conundrum—say thank you to your best customers and sit them next to the lavatory?
Read a similar story in The New York Times today: Still Loyal to Your Airline? You Must Be Looney Tunes
The disadvantages of a hard wire system is that it can cost more to maintain and repair.
Posted by: home security systems | April 27, 2011 at 02:46 AM