Here is a question for you: how many loyalty cards do you carry with you in your wallet? If you are like us your wallet will claim loyalty to supermarkets, pharmacies, service stations, the local coffee chain…to name a few. The list of businesses offering loyalty schemes to customers seems to grow year on year, with brands working to increase repeat purchases and enhance customer brand loyalty.
As most of you are well aware, the cost of maintaining a customer is far less than the investment required acquiring a new one. The most valuable customers are not the ones that make the most expensive purchases but rather those that come back again and again over their lifetime. Loyal customers not only drive profitable returns, they are more likely to come to you, buy more often, try new products, recommend you to others, and become brand champions for your business.
When first introduced, loyalty schemes were intended to inspire customers to become truly loyal to a brand. It was presumed that rewards of discount, bonus points and special offers were enough to encourage repeat purchases from customers. It quickly became apparent however that customers carry multiple loyalty cards and simply collect rewards wherever they shop.
The true benefit of loyalty scheme cards lies in the valuable customer insights they offer businesses: who are the most profitable and least profitable customers, what do they most want and what changes or offerings would be most likely to make them truly loyal. However while the customer benefits from small discounts, traditional loyalty schemes on the most part fail to achieve their intended purpose of enhancing the customer lifetime value by creating a truly loyal customer.
The Secret Society
Cue the emergence of the ‘secret society’ customer loyalty schemes. How would you feel if you were one of the select few who knew about a secret pop-up-shop sale in a retail store? What if you were given access to stock that wasn’t available to the ‘average customer’ off the street?
Giving loyal customer’s exclusive access to items, menus, locations, particularly when they are not advertised to the general public not only develops fierce brand loyalty but also delivers a unique enhanced brand experience, at little extra cost.
Fast Food restaurants and coffee chains have long prospered by making their service a scripted experience, managing costs by offering customers a restricted menu option. Now what if we told you that McDonalds, Burger King, Subway and Starbucks were some of the many brands who have a secret menu known to only fraction of their customers?
These are not simply made-to-order items for the picky customer, these are a list of options known to staff which have been allocated valuable prep time, inventory management, and storage space to make sure they can serve the item. These secret items are based on loyal relationships between the brands and their regular customers.
In–N–Out Burger in the US is the most famous ‘outed’ secret menu story. The company always had a ‘desire to please its guests’ as a core value of the brand. When regular customers began ordering variations of the standard menu with such frequency that they were given names by the staff, the ‘secret menu’ was born.
The Secret Strategy of Special Treatment
The essence of the “secret” strategy is the word-of-mouth by regular customers. The item can’t be marketed through other means or it quickly looses its appeal. Customers like to feel that they have almost VIP access to things their peers cant get. They develop an affinity for the brand and are often willing to share their ‘insider’ information with a select friend who too will be eager to claim access to this secret society of special customers. Nothing boosts loyalty like a little special treatment.
Big brands such as Starbucks can handle when their secret menus are shared publically. Once the item is not on the menu and the majority of customers are not aware, loyal customers still gain a sense of exclusive treatment. The brand benefits from greater customer awareness of the ‘secret’ menu because it lends a fun or intriguing element to the brand image. For smaller brands, having a more tightly guarded secret offering could inspire prolonged loyalty from valuable customers in the know.
Reward your loyal customers with access to special offerings. Make the offering worthwhile; something they want based on their purchase history. Remember, it should be a bonus not a burden for the customer; do not require them to fill in forms etc to gain access. Knowing what to ask for should be enough.
When you let your loyal customers in on the secret make sure they know its not for everyone, but not so much of a secret that nobody knows; while keeping the secret offering to a select few is necessary for its success, the more people in the select group the more loyal customers you develop for your brand.
• Could a secret offering boost brand loyalty with your customers?
• Could a little mystery enhance your customer’s brand experience?
• How could you introduce ‘secret’ rewards for your ‘loyal’ customers as party of your brand strategy in the year ahead?