Aim for captivity... Not loyalty

Every marketer worth his salt wants to implement a loyalty program. What the word "loyalty" in a loyalty program means is still debateable. Also, whether the loyalty programs actually result in loyal customers is also something that need to be proved. Many times a pissed off customer will first consume all the loyalty points and then terminate the relationship. A much worse scenario is when the "terms and conditions" make it very cumbersome and irritable for a customer to enjoy his loyalty earnings. How many marketers have actually walked in the customer's shoes thru the loyalty reimbursement process? I don't think very many have done so. Especially not the airlines .. which are the most avid adopters of loyalty programs aka frequent flyer programs. Ever tried to reimburse the frequent flyer points at the last moment... there will never be any "seats" available on the program.

Creating a loyal customer is not sufficient. Lets learn some lessons from the masters who have designed process to never lose their customers (if I may term them as customers). Which is the jail houses. The customers are prisoners. The program is captivity.

A marketer should design process that makes the customer a captive inmate. The cost of exit should be exceptionally high. Thats how a jailhouse is successful. The cost of escape is often the danger of being shot at or worse being nabbed and getting a longer session.

A telco can use convergence to its benefit to captivate its subscribers. For example, a telco in europe provided its subscribers to create a phone book of sorts on the web site. The phone bill created, instead of showing the phone numbers of the call records, replaced the number with the name of the person as defined in the phone book. The bill also grouped interactions person wise. Now a subscriber who goes through the toil of creating a phone book on the web site will not want to go through the same grind with another service provider.

Mobile manufacturers have an excellent opportunity to lock in their users. The concept of "customized tunes for callers" is a very very strong feature. Imagine someone having a 100 entries in the contact list and have defined customized tunes for a large number of them. This will definitely form a barrier to switching mobiles on the fly. I must make a note here.. that this is not the only thing that will hold a user. Unfortunately, none of the Nokia, Sony Ericsson, LG, HTC, Blackberry (and others) leverage this feature strongly. It should be simple to do... when a user gets a call from the caller without a custom caller tune attached, the phone should prompt the user to select one after the call is over. Over time the number of people with custom caller tune will exceed the point where the user would not want to do it all over again. At this stage, another feature which allows a Nokia user (say) to transfer the setup from one Nokia phone to another Nokia phone will be very useful and helpful in creating a stickiness to the Nokia brand.

Grocery purchases are often a chore rather than fun activity. A grocery retailer could allow a customer to define her basket of regular purchase. Then have an SMS facility wherein the customer sends in her request for a particular basket and have it delivered to her home. What a convenience that would be? Would this customer want to go over the pain of defining her baskets with another retailer... highly unlikely.

I have found in my interactions with people performing retention models for banks that the "bill pay" facility is very high on the captivity factor. Yet, so many banks charge the customer for this facility. They should make bill pay a impulse activity. Whenever a customer drops a cheque for payment of any utility the bank should proactively offer to enable "bill payment" for that utility. But, alas, how many banks do so? None that I know.

Back to our prison case, if the life in prison is better than the life outside prison then the "customer" may love to be in for life. During my recent trip to South Africa, I came across a news item wherein an arrested suspect was found innocent but he refused to leave the prison compound since it was the first time in his life that he had a proper bed to sleep in and a personal space in his cell. Now, if only we had customers who felt life with their service provider is better than life without the same, we would not need any more marketing budget.

So aim for captivity... think like a jailer. Lets talk on how to achieve this in your business... mail me at michaeldsilva@gmail.com