business news in context, analysis with attitude

by Kevin Coupe

There was a fascinating blog post on the subject of loyalty marketing, written by Kathy Sierra on and sent to me yesterday by several MNB users. It makes a point that often has been made here on MNB, but does so with specific and compelling language, and is worth sharing.

The posting reads, in part:

“Customer Loyalty” is a figment. Business “Loyalty Programs” are nothing more than rewards-based marketing. And by rewards (aka “incentives”), I mean bribes. That we so easily refer to a customer with a bagel punch card or virtual badge as more “loyal” is an example of just how far we’ve allowed corporations to abuse the language around human relationships.

I would storm a burning building to get my kids. THAT is loyalty.

I would even storm a burning barn to get my horse.

But I won’t storm a burning Best Buy no matter how awesome their Reward Zone program.

I’m not going to become more loyal to a business no matter how well-executed their Super Awesome VIP Exclusive Content Access Status Rewards Achievements Gamification program is ... That I often DO buy (and sometimes buy more) from the businesses that offer formal Rewards Programs does not imply I am loyal to those businesses. I’ve nothing against my wallet-full of coffee cards (which I use, and appreciate). But that is not loyalty. I’m happy to “LIKE” your Facebook page for an entry in your iPad giveaway, but that is not loyalty.”

Sierra goes on:

In fact, when you “incent” me to “engage” with your site, deep in my heart I understand now that I have sold out. By giving me bribes/incentives, no matter how much you call them “rewards”, you have communicated to some part of me that if I had to be incented to buy/act/engage/whatever, it must have lacked value on its own. This de-valuing effect can be true even if the thing really DID have intrinsic value for me. In other words, even if I’d actively wanted to do the thing-you’re-bribing-me-to-do, you’ve tainted it. Possibly even wrecked it for me, even if I am not consciously aware.

Here’s a great turn of phrase:

If we have to pay to get it, it’s not loyalty.

Here’s where she really kicks it into gear:

I DO have a few products I appear loyal to:

I would give up my iPad for Adobe InDesign.

I would give up sleep for the latest Neil Gaiman book.

I would give up carbs for my Astund Icelandic saddle.

And I’d give up all of the above to keep using my Mac.

That sure looks, sounds, smells, quacks like loyalty.

And it is.

But it is NOT loyalty to Adobe, Gaiman, Apple, or my Icelandic saddlemaker.

I’d walk through hot coals for those because I’m loyal to… myself.

The key to understanding (and ultimately benefitting from) true “customer loyalty” is to recognize and respect that customers–as people– are deeply loyal to themselves and those they love, but not to products and brands. They are loyal to their own values and the (relatively few) people and causes they truly believe in. What looks and feels like loyalty to a product, brand, company, etc. is driven by what that product, service, brand says about who we are and what we value ... If I buy from you it’s not because I like you but because I like myself.

And, a big finish:

Of the four products I appear loyal to, none have ever given me an extrinsic reward. No punch cards, frequent-purchasing discounts, or Exclusive Access VIP Status (Now! With Better Badges!). No leaderboards, no contests, no discounts. But all have given me something far more valuable: enduringly rewarding experiences.

They have upgraded my personal skills, knowledge, and capabilities. They have made my life better. They have made ME better. THAT is the ultimate customer reward. When you give your users that, you still won’t have loyalty, but you’ll have something sustainable, robust, and honorable ... The companies who we appear loyal to are those that best help us define, refine, and express who WE are.

That’s terrific, eye-opening blogging. (I’m jealous.)

You can read the entire post here.

And it makes a critical point - MNB Rule # 6 - that every business using so-called “loyalty marketing” programs needs to think about.

A loyalty program does not make a customer loyal to a business. Rather, it proves to the customer - every day - that the business is loyal to him or her.
KC's View: