Is Your Customer Loyalty Program Really Part of Your Strategy (Or Just an Add On)?

Posted on by in Branding/Differentiation, Business, Customer Service, Marketing, Remarkability, Small Business, Strategy

How many times have you been in a retail location that had a “customer loyalty” program that didn’t really work? Not that the cashier didn’t know how to punch the card, but that the store really didn’t stand behind the offer? Or to put it another way, where you felt like the management had a “loyalty” program because they were “supposed to,” but they really didn’t want to have one? If you’re like me, you’ve felt that way often.

Tonight was one of those kinds of nights. I typically do most of the cooking in our house, but wanted a night off. Since our family likes to eat reasonably healthy, I suggested, “How about Ricky’s Rice Bowl?”
As I was getting ready to head over to pick up dinner I remembered that I had a couple of old “loyalty” cards in my office which would allow me to get one large dinner menu item, which leads to my story.

Back in the early days (under different management), Ricky’s ran a loyalty campaign called “Lucky 7″. If you bought seven rice bowls (large or small), you would get a large rice bowl, plus a free drink for number eight. Even better, Ricky’s ran special double stamp days each month. As a regular fan back in those days, all of us “regulars” were incredibly faithful. Not only did we eat there regularly, we’d plan meetings there, and we’d regularly check the monthly calendar to find out when the double stamp days were. And the result of the old Lucky 7 loyalty program was that the place was packed and it was hard to find a table!

However, as soon as the new management came in, out went the Lucky 7 program and begrudgedly in came the new Lucky 12 program, which killed traffic. Even worse, the new management no longer tells customers about the program, has printed on the “loyalty” card, “All stamps must be on the same card. Stamps can not be collated from different cards,” no longer includes a free drink (even though you have to purchase five more meals than before to get the free rice bowl), and the management makes you feel bad that you’re using THEIR “loyalty” card. Oh, and the result of all of these changes is that the place is empty–though, of course, the one silver lining in all this is that it’s now easy to find a table at Ricky’s (or two or three or . . . you get the point).

Same restaurant. Same food. But simply by changing the rules of their “loyalty program,” one owner was able to pack the place and engender incredible buzz for the restaurant while the other was able to empty it and kill all positive word of mouth. Though I’m guessing that the second owner would say he has a loyalty program, he’s killed his growth by not using it well.

So how about you? What kind of loyalty program do you have in place to facility more frequent purchases and buzz? And if you do have a program in place, is it working for you? Are you committed to it? Does in engender buzz? Are your customers buying more often? Or is it just something you have in place because some consultant told you to have one? I hope not, because if you use it right and make it a key part of your marketing strategy, a customer “loyalty” program (in whatever form it takes) can be one of the biggest drivers of growth for your business.

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2 Responses to “Is Your Customer Loyalty Program Really Part of Your Strategy (Or Just an Add On)?”

  1. Ric Adamcik 2 June 2010 at 7:08 pm #

    Hi I am the original “Ricky” of RIcky’s Rice Bowl. I opened the first Ricky’s on Cordell Ave in Betehesda, MD in 1990. I started the “Lucky 7″ as a loyalty program that really became a loyalty process. The Lucky Seven was certainly “user friendly” and encouraged customer returns at an alarming rate. There were some days I gave away more free bowls than I sold, which at times made me reconsider the program. But the ROI was great and the customers became my best method of advertising and the most cost effective. I wish people wouldn’t get so greedy and realize that customer loyaly is really business survival. Thanks for the recognition and great article.

    RICKY – the real one, honest.

  2. Bruce Johnson 2 June 2010 at 7:17 pm #

    Ricky, you are missed! I loved your Lucky 7 program and used to eat there almost weekly. Now, I eat there maybe two to four times a year. The place used to be packed, now, not so much. Hope you’re doing well!


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