“Loyalty company” and “company with loyalty program” = different

Customer Loyalty vs. Loyalty Company

This about sums it up.

Here’s a story from a couple of years ago: when my wife and I were dating, we drove up the Mississippi from Jacksonville to Minneapolis. Ironically, two years after that trip, we ended up living in Minneapolis randomly. That’s neither here nor there. It was a weird trip — first long road trip together as a couple, some fights — and when we got to Milwaukee, she went to take a nap and I wanted to check out the city. I realize very few people in history have ever typed into a blog “I wanted to check out Milwaukee,” so let me explain for a second. When I was 11, I wrote a letter to the GM of the Milwaukee Bucks, because I was a precocious little sports fan (read: bitch). He wrote back by hand. So, I’ve always been tied to the Bucks because of that, even though I’ve never lived in Milwaukee and the only time I’ve ever been to Milwaukee is this story I’m about to tell. (Personal connections drive everything, salespeople.)

So I’m walking around Milwaukee, right? And eventually I duck into this bar. It’s called Buck Bradley’s, and they’re all like “This is the longest bar west of the Mississippi!” Indeed, ’twas quite a long bar. Probably about 70-100 seats, legitimately.

So I see this “loyalty program” they have / “challenge,” and I ask about it. 

Bartender tells me, “Well, it’s pretty basic. If you have a drink at each of the bar stools, you get a free beer.”

I stared at him for a second.

“You mean if I have 70 beers at $5-6 a pop, meaning I spent $400 in here, I get a free beer worth $5?”

“Pretty much.”

That was, at least around April 2010, their value prop / loyalty program.

Ever since that moment, I’ve always been skeptical of the entire idea of loyalty programs. Sometimes I think the only relevant ones remaining are airlines, because at least when you excel there and have a lot of miles, you can essentially trade them for a free trip somewhere. And that seems cool, no?

That Forrester article linked at the top here is a little too business-term-heavy, such as this paragraph (which is preceded by a reference to “meaningful exchange of value”):

Develop emotionally resonant brand experiences. Today’s CMOs are tasked with the uphill battle of creating brand experiences that transcend products and service transactions. Loyalty insights provide customer-centric input for brand experience development and assessment. For example, after examining the data from its loyalty program, an online retailer was able to course-correct a branding strategy that largely targeted a mercenary and high-churn customer segment.

Here’s another way to say what was just said above.

Point being: companies often like to have “loyalty programs” because they see it as a way to retain/gain customers, but then internally they get worried because, I mean, goddamn … you don’t want to give too much away, right? So a “loyalty program” can become a farce, but a “loyalty company” — one that actually focuses on paying it forward to their best consumers — will never die out. It seems like a subtle difference, but it’s a fucking chasm. And it can mean millions of dollars for you.


Ted Bauer