Customer loyalty programs don’t always build customer loyalty

Remember “green stamps?” When I was young, my parents saved them in a booklet, carefully collecting them until they had enough to send away for some great housewares or knick-knacks. S&H Green Stamps were popular in the United States from the 1930s until about 30 years ago, and were distributed as part of a rewards program operated by the Sperry and Hutchinson company (S&H). In the 1960s, the rewards catalog was the largest publication in the United States! You could get the stamps at the checkout counter of supermarkets, department stores and gas stations, and many of us still have old relics from the catalog in our attics.

These days, we all have those punch cards good toward a free cup of coffee, or a “points” card good for coupons on electronics.  It’s the same customer loyalty idea that S&H had years ago when my parents’ generation saved the stamps. For decades, companies have been trying to figure out how to engage their customers and gage their loyalty.

Unfortunately, these reward programs can backfire. It takes a lot more than a punchcard to get your customers coming back for your goods and services.  If you want to read a great article on this, check out author and business strategist Carol Roth’s article titled, Leading a New Era of Customer Engagement with Customer Loyalty 3.0. Carol discusses three levels in customer engagement, and helps companies understand how both they and their brands can make spenders feel cared for and important by taking a holistic approach.

But because not all customers have the same wants or needs, we need to know who they are and we need to listen to their conversations to understand what is important to them. Like anything, it takes time and a lot of effort to do this, but I think it is time well spent to build solid, loyal relationships.

2011 Consumer Trends: How will we shape innovation?

From healthier choices to improved relationships, we all want the things we buy to make our world a better place.  How are we as consumers going to shape the coming year for companies striving for innovation success?

There are dozens of consumer trends we’re watching for 2011, and soon you’ll see some brand new lists of projections from the futurists and news articles about how corporations need to adjust and embrace these new trends.

One particularly interesting list I found on Consumertrendwatching.com covers everything from pricing, coupons and country of origin to how kind we are to our customers.  Check it out and let me know which ones resonate with you: (more…)

Embracing Generation Y

As a parent I’ve had a lot of experience delving into the mindset of one of the biggest market segments in the world.  Generation Y, sometimes called the Millenials or echo boomers, will significantly shape the way Boomers (like me)  work, shop and play.

There are a lot of forces shaping this huge demographic group, which includes those born between 1977 and 1997. They are our teens and young adults. With more than 80 million members, The Ys outnumber those in my generation by more than 3 million people.

Here is how the generations align in our history:

1901-1924 “G.I. Generation,” came of age during World War II and was known for its respect for government and its patriotism.
1925 – 1942 “Silent Generation,”  known for its post-war stoicism and its ability to take adversity in stride.
1946-1964 “Baby Boomers,” the largest generation of the past century, is credited for creating and defining the American middle class.
1965-1976, “Generation X,” a more independent and cynical generation.

So how do we define this Generation Y? And how are they shaping future trends for the rest of us? For one thing, we know that this generation is less likely to read a newspaper,  subscribe to cable or satellite television or own a land line.  They love brands and have an incredible purchasing power that those in other generations did not. They are more optimistic about their futures. They are techno-savvy and probably  the generation best prepared for globalization, but their employment expectations and work habits tend to rub older generations the wrong way.  (By the way, that last link about work habits is an excellent read if you are an employer.) Here’s a snapshot from this article about some common frustrations:

“They walk in the door on day one with very high expectations.”

“They don‟t want to pay their dues and climb the ladder.”

“They walk in the door with seventeen things they want to change about the company.”

“They only want to do the best tasks.”

“If you don‟t supervise them closely, they go off in their own direction.”

“It‟s very hard to give them negative feedback without crushing their morale.”

“They walk in thinking they know more than they know.”

“They think everybody is going to get a trophy in the real world, just like they did growing up.”

Each new generation brings its own challenges and unique gifts to the table, and understanding and relating to the emerging generation has always been the key to harmony. The reality is, we all need to do some research into this dynamic and unconventional group of young people who are leading the charge and changing the game.

Are You a Brand Fan or Follower?

Why do consumers follow brands on Twitter or Facebook?  It depends on which social media they’re using, according to a new study out this month.

According to the report published by market research firm Chadwik Martin Bailey, Facebook users were more likely to show their support for a company they liked by becoming a fan of the brand on the social network while Twitter users were more likely to follow a brand to receive real-time information and exclusive offers.

It goes on to say that consumers were nearly 70 percent more likely to recommend or buy products from a brand after following them on social networking sites like Twitter and Facebook.

Consumers said that their number-one reason for becoming a fan of a brand on social networking sites was to receive discounts from the companies. Other reasons for following a brand included previously purchasing a product from the company, wanting to show others they supported the brand or to gain access to exclusive content.