The Loyal vs. The Full-Price Shopper

Has anyone else ever noticed the hypocrisy in "loyalty" or "rewards" systems? The idea sounds fine...I shop with you so often that you give me incentives...so that I will shop with you even more often. In most cases, you have to spend an awful lot to begin getting rewards or points that can be used for anything useful. Which means that if you're getting a bunch of points you are, by nature, incredibly loyal to that brand. So why do I suddenly feel like an outcast when I finally try to cash in on this great new relationship we share? In my opinion, it shouldn't be harder or take longer to get what I need than it would ordinarily take when I'm paying full price for something.

I should start with a positive example, Dick's Sporting Goods. This is one of my favorite places to shop, and has the easiest rewards program I've ever used. The best part: you don't have to spend a ton to begin receiving some pretty nice incentives/discounts. The next best part: I don't really have to keep track of anything on my own. The system is nicely integrated with their point of sale system, so even if I can't produce a key fob or a rewards card, they can look it up at checkout so I get the most out of every purchase I make. In my case, I can honestly say that every major purchase I have made at Dick's Sporting Goods has resulted in points accrual or some other incentive that has led me back to the store for a follow-up purchase. For any retailer, this is the dream.

In contrast, I recently attempted to redeem American Express Rewards points for a Hertz Car Rental voucher. In the first attempt to view my account balance, something was wrong with the site. It gave me an 800 number to call. The voice on the 800 number asked me for a validation code (which apparently was supposed to be shown on the screen) so I told the recorded voice that I didn't have a code. The recorded voice then repeated her request for a code...but louder this time. I was pretty impressed that the phone system seemed to intentionally raise its voice at me...but nothing can explain why the site was not in sync with the call center.

When I finally checked out out and received my Amex voucher, I visited the Hertz site. I have used Hertz.com so many times that I can fly through it pretty quickly now. (I love it, and use it exclusively for renting cars on business trips.) After you enter your itinerary there's an option to put in a voucher code...so I expected this was going to be a piece of cake. Once I entered the code, I received a nasty little red warning stating "this code cannot be redeemed online...call the 800 number." So here we go again. I went back and read the Amex voucher and it said the code could be added after the reservation is made online. So I went ahead with my usual steps and picked my car, figuring I'd call later.

But here's the biggested disconnect...

Anyone who uses Hertz knows the #1 Gold program is completely superior to any other rental car company. Make your reservation, get dropped off by the shuttle close(r) to your car, find your name and slot number on the board, get in your car and leave. It's all waiting there for you before you arrive...trunk open, keys in the ignition. There's no standing around at a counter, filling out paperwork, turning down extra insurance, debating over gas options...just get in your car and go. But what if you have a rewards voucher?

The Hertz lady was nice when I called. She added a few pieces of information to my reservation and I figured that would be it. But then she informed me I would have to go INSIDE and speak with an agent to add the voucher to my reservation, before I could get my car.

So here I am...a loyal customer of both Amex AND Hertz...and a member of both rewards programs (which you can't use unless you use them alot) and when I finally get the benefits I'm forced to take several additional steps to get what I need. Now that I'm not paying full price, I don't get the same level of service.

Makes me wonder how many people just give up...which makes me wonder why some brands bother with loyalty programs at all.

A Brand Promise

A promise is a promise. I was always taught that I should keep my promises. Sometimes a promise is made with a simple "yes sir" or a handshake...more often today it's made with a contract.

So what happens when a brand makes a promise? What kind of agreement exists between the consumer and a brand? Should the brand keep its promise? And what happens when it doesn't?

All the buzz these days is about low customer satisfaction...how companies who can differentiate themselves through exceptional customer service will rise from the economic ashes once this inferno has been quenched. And then I read about Starbucks. I must admit that I used to spend way too much on lattes back when the economy wasn't so bad. These days I've definitely changed my buying habits, and typically only buy Starbucks coffee when someone else is buying; i.e. on business trips or charged on a gift card. I would still consider myself pretty brand loyal, but not enough to continue spending as much for coffee as I do for gas.

So...considering the kinds of promises Starbucks has made to its customers over the years, and the consistent rise in their prices, it seems they were betting they could trap so many of us in coffee euphoria that we would all continue funding our addiction regardless of the economic climate. If they could have actually carried out the brand promise consistently across their vast retail network, I might be one of those people scrimping every couch nickel for my precious caffeine fix.

We've probably all read stories about what Starbucks intends to do for each of its customers. Essentially, they want to create a unique coffee experience for every customer, providing a personal touch and making each customer feel the coffee love. That's their brand promise (as I iterpret it). So how many times has Starbucks delivered the absolute perfect experience to me? I can count them on one hand...although I've visited dozens of different Starbucks locations across the country. I can tell you my best experience...and I can tell you my worst experience. Which one do you think I talk about more? Let me share a recent positive experience at a local Fort Wayne Starbucks (on Lima Rd near I-69): the barista was incredibly friendly, she asked me what I was in the mood for. I was fighting a cold, so I told her the new berry tea looked pretty good. She offered to make some and let me have a sample. I liked it, so I ordered one. It took a little longer than it should, and although I wasn't in a rush she ended up giving me a grande cup of tea free of charge. She was empowered to deliver the brand promise.

But I WANTED to pay for that cup of tea!!

That isn't the first time I've ended up with free coffee for waiting a few extra minutes...I've received several apology cups (mostly from Chicagoland) in the past. But the warm greeting, the attention to my mood, the sensitivity to my time...it all delivered the brand promise. If every employee behaved that way, I don't believe Starbucks would be closing stores right now.

The Lessons of Winning

It always seems like big wins only happen to someone else. Growing up I recall a few times when the home team had a surprising upset or nail-biter victory, but most of the time it seemed like we watched the other side bask in all the amazing last-second scores. I became so pessimistic that this could or would ever happen to me or my team that when I watched a game I usually prepared myself mentally for the inevitable fact that we would not be capable of pulling off a last-minute victory. It simply never happens…its impossible. With that attitude in place, I began watching my daughter play basketball today with other fourth graders. They were evenly matched, keeping the spread within two baskets most of the game. (Their previous matchup was lost 28-6.) But entering the second half that old feeling came back; whatever possible edge we had would soon be crushed and the other team would begin slipping out of our grasp. It wasn't until the last 14 seconds of the game I realized that a victory was possible...I let myself start to consider that we could win this game. Down by a single point, we regained possession in the last six seconds and the final hoop was literally sunk at the buzzer. The all-American last-second slow-motion "swish" only seen in movies had played out before our eyes – possibly the only time that will happen in my lifetime. Parents high-fived each other, some tossed the hero player into the air and it felt so sweet to know we tipped the scale in the last second. In life, in business, in anything, I wonder how often we eliminate ourselves from the race too early when we don't allow ourselves to be optimistic of a positive outcome. A last-second win is always possible.

Remembering the Birth of Multi-Channel

It was 1996 when I met Bob, the owner of a Michigan bike shop. He was working with friends on a new idea for promoting bicycle races in the area. I helped get him free Internet service in exchange for listing the ISP as a primary sponsor for the circuit. Free Internet! Then I remember watching the light bulbs go on when we started talking about reaching niche communities with bulletin boards, newsgroups and email.

Bob understood that his bike retail business -- stuck in the middle of a small town -- had limited growth potential compared to the vastness of the Internet. He also realized there was something special in his product assortment, expertise, attention to detail, passion for bikes and a candid approach to customer service that people beyond his small town might enjoy. He was a true brand advocate, with a strong desire to pursuade everyone to ride a bike. "Friends don't let friends ride junk" was his tag line. He would often rebuild customers' bikes and then drive his Astro van an hour out of the way to deliver them personally.

Almost overnight, there were dozens of newsgroup posts. Interested in a crank, some pedals, a frame? Email Bob. Suddenly this local bike retailer became known by other bike lovers across the country and around the world. This was a true multi-channel retailer before the concept was ever labeled. He was happy serving one customer in his store, but couldn't help trying to reach out to as many people as possible.

Good lessons from the first multi-channel pro I knew. Thanks Bob.

My Zappos Encounter

If you're into buzz marketing, you can't help noticing Zappos.com. Their entire new web environment (zeta.zappos.com) embraces their social culture, filled with reviews, video, blogs and other hidden surprises. The company has a fanatical customer service approach...and they don't just say it's important, they live it daily. Zappos' approach has been so successful that word of mouth referrals are still their biggest source of new customers. They also have one of the highest customer retention rates of any retailer; a solid 75% are repeat buyers.

The company CEO, Tony Hsieh, has adopted an open leadership approach, sharing random thoughts and posting the most mundane activities on Twitter. His "followers" -- over 12,000 of them -- include most of the Zappos crew. Many of them have hundreds of their own "followers" making this a substantial network of Twitterers.

I've only recently started using Twitter myself, watching people like Tony (@Zappos) share random activities and photos while meeting other fascinating people or traveling to exotic places places like Beijing and the Google Zeitgeist. Prior to a recent trip to Las Vegas (near Zappos' world headquarters) I wondered just how friendly this Twitter society really was. So, I sent a Tweet directly to Tony.

"Heading to Las Vegas for shop.org next week -- can I stop by for a tour?"
The next morning I receive a reply:
"Yep, someone from our helpdesk will be emailing you re: tour, thanks!"

Apparently another component of the Zappos culture is to provide tours to just about anyone, so I'm glad I asked. The director of the help desk, Donavon (@Zappos_Drob), contacts me to arrange the shuttle from the airport. When I arrive, a bright yellow SUV emblazoned with the Zappos logo is waiting at the curb. One of the customer service representatives, Angela (@Zappos_Achege), is the driver -- they all take turns picking guests up from the airport.

With a pleasant welcome and cold water bottles, we're off to Henderson. Angela is inquisitive and friendly, asking about my trip and where I'm from. I ask her if the rumors are true about the odd interview process. She says they are "interesting" -- interviewed by six different directors she was finally asked, "what is the strangest thing you can do." The short trip takes us through a few nice neighborhoods until we arrive at a modern, clean office park. I've wondered what the Zappos campus would be like, and as we approach I see the first glimpse of some ultra casual workers taking a smoke break outside. I'm greeted with a "hello, welcome to Zappos" by almost everyone...although it doesn't sound contrived. Everyone seems genuinely happy that customers come to visit. The lobby is a hive of activity, small bar stools poised against the reception desk to make me more comfortable as I sign in and receive an honorary name tag. A large sign on the wall reads, "Zappos.com -- Powered By Service." Pam is the first to greet me at the counter, with my name tag already filled out and a large "special guest" flag in her hand. The tour starts at a glass case with the founder's original pair of shoes (the ones he couldn't find and inspired the idea), along with the original business plan. That humble memento is juxtaposed near the crystal Bank of America award congratulating Zappos on it's first $60,000,000 line of credit. Several bookshelves contain the favorite books of the management team with titles like "Blueprint to a Billion," "Branded Customer Service," "Tribal Leadership," "Citizen Marketers," and many others. The books are handed out freely to employees and customers.

Down the first hallway I can tell that employees are used to seeing guests. They all manage to give some happy greeting and then keep working like it happens all the time. Turns out that as many as 20 trips are taken back & forth to the airport each day. Pam explains the importance of their technology group, talks about the marketing & creative talent, shows me the wall with recent boot camp graduates (everyone must attend training at the Kentucky distribution center), and lets me sample a small strawberry ice cream cone. Everything (except the Red Bull) in the break room is free to employees. And if folks can't get enough of the Internet, there are sub-stations set up for personal use. The upper floor houses most of the merchandising and customer service representatives. Somewhere between Couture and Shoes is a jungle-like atmosphere with palm fronds and leaves hanging from the ceiling. This is where Tony sits. I missed him on this visit -- he left for Orlando ten minutes earlier. Many of the sections of cubicles are missing the fabric panels. Workers walk right through the blank frames in defiance. There are shoes everywhere. Branded displays that you might see inside a normal shoe store are propped up in various places throughout the building, close enough so the reps can grab one to tell a customer more about it. At one stop on the tour I am gleefully greeted by someone named Dr. Vik, former chiropractor turned life coach. Before I realize what's happening, I find myself crowned (literally) and seated at a big red throne under a big "I'm Royalty at Zappos" sign in his office. My polaroid is added to the wall amid thousands of others. Under his desk are several boxes more, and he comments that he needs a bigger office now.

With all the commotion in the workplace, my nerves are calmed a bit when I see the relaxation room. Inside are several tranquility pods; plastic cocoons to escape from the hectic surroundings. Before I leave, I'm asked to take as many books as I'd like -- a sign that this company's passion and customer service philosophy should be shared with everyone.

On the way out the door, I'm asked to contribute to a beach ball-sized conglomeration of all the stickers from all the visitors that have gone before me. Somehow I know I'll be back some day.

A Social Brand: Before There Was Internet

It started with a simple message... "i love VB! :)"

On November 13th, 2007, at 3:34pm...the Vera Bradley page on FaceBook was born.

When the marketing team at Vera Bradley brainstormed ideas for the 2007 holiday season, suddenly it felt like the right time to engage fans online. After all, customers had been creating their own communities and chatting on blogs like LiveJournal and MySpace for months. Just a few years earlier the attitude was, "why would anyone spend time talking about handbags on the Internet?"

There have always been followers of this American success story...and they were talking about their special bond with the product long before Al Gore invented the Internet. The Vera Bradley brand has grown as if the company was deliberately using a direct selling model. But people weren't being paid for having home parties...they just shared their love affair with their favorite handbags whenever they got the chance. They shared their collections, gave gifts, and treated themselves to a little happiness in a colorful quilted bag.

Now they get together online.

"What bag did you use today," Sarah asks. The answers reveal a companionship with the product...."this one's going to class with me, but later I'm taking this one to work..."

Another post, "Is there anything you wish Vera Bradley made?" just gave the product development team the kind of information that used to take hours of brainstorming and cost thousands in research.

Over 36,000 FaceBook fans, 2,000 discussion topics and 1,200 wall posts later, this really should come as no surprise. After all, the company has featured its friends and family in catalogs since the beginning. Friends and family work for the company. New employees often comment how "everyone is just so nice" when they start their new jobs. Friendly, approachable, fun...authentic. It's the culture that makes this brand a no-brainer for social media. And with product names like "Java Blue" and "Raspberry Fizz" why wouldn't people want to talk?

The discussions aren't always so nice; questions about manufacturing or quality pop up and are debated. The biggest fans are brutally honest sometimes. People want to know why a certain color was retired, just when they started to like it. The new colors are stellar, or a total disappointment. No matter the topic, the loyalists will debate their position and share how they really feel. Like every relationship, sometimes you have to air your concerns -- it's the kind of authenticity and transparency people expect from their favorite brands.

If Vera Bradley were to stay away from the social crowd...only feed the craze with traditional media like ads, catalogs and mailers...would the brand continue to grow? Possibly. But as the brand evangelists continue to carry her products and tell her story, Vera Bradley would risk losing a new era of consumers who expect to hear a real voice. The images on the page would appear contrived; models staged for a photo shoot just to sell more quilted cotton handbags. Just another advertisement from a manufacturer trying to make money.

If the only brand elements a customer touches and sees are on cold paper, the company is saying that it doesn't want to have a real conversation with its customers. "Just buy our products and we'll keep making them." That wouldn't be logical, and would be contrary to the brand promise.

The communication paradigm shift may be painful to some execs and old-school marketers, but brands must constantly rethink how to engage customers in conversation, considering the high expectations and power of the crowd. For this company, it all started with a gift, and it is very fortunate to have sustained a social following that other companies can't buy.

Community Brands

The tree planted in my back yard comes from the Plant Center down the road. My wife saw a "tree sale" sign and couldn't resist, so I borrowed a neighbor's trailer and picked it up. It's a big tree.

The way I was treated at the Plant Center motivated me to share my story with everyone. They gave me advice because they wanted me to enjoy the tree and wanted to make sure it would last. They loaded the tree carefully into the trailer for me and provided instructions how to place it in the ground, even though I saved $100 by picking it up myself. And when I asked for some top soil to finish my landscape project, they charged half price even though I had just purchased a discount tree...without delivery.

Do you think I'll recommend this place to my entire neighborhood?

Now my neighbor has a tree planted in his back yard just like mine.