According to academics at the University of Scranton, about 45% of Americans make New Year’s resolutions, yet only 8% actually achieve what they set out to accomplish. Most fail within less than a month.
Reasons for our collective failure are many. But some of the most common include: setting vague goals, making too many resolutions, an inability to turn what we say we’re going to do into a habit and not rewarding ourselves when we achieve our goals.
Not surprisingly, business leaders and corporations make New Year’s resolutions too. Some of their most common include: being more thoughtful to employees, focus on employee benefits, talent recruitment transformation and continuing education investment. While no doubt helpful, brands could also learn a thing or two about how they engage – or how they should not engage – their most loyal customers.
AT&T is a good example of this kind of corporate failing. The telecom giant made a faux pas earlier this year when it aggravated renowned tech columnist David Chernicoff, unintentionally undermining his loyalty ‘experience.’ AT&T told Chernicoff – a longtime customer with eight personal and business lines – that it was reinstating its $36 activation fee when upgrading phones or adding new lines. The reason for the change: AT&T needed the $36 revenue as a way to entice new customers with cheaper (read: subsidized) phones.
Does this sound familiar? Chances are, it does.
Giving customers an exceptional experience is not a challenge unique to AT&T. Many telecoms have been criticized for rewarding new customers with greater perks while overlooking their older ones. In fact, 36% of US customers say they are likely to leave their mobile carriers in the next 12 months and of those likely to leave, 40% said it was because they weren’t valued or rewarded. Recognizing this troubling trend, Canadian telecom Rogers announced major changes to its customer rewards program earlier this summer, and as of November the revamped program enjoyed its national rollout. Their program now allows customers to earn points on select products and services in a bid to make all members feel equally valued.
Embracing the Five
What have we learned so far? Effective customer reward programs shouldn’t forsake one loyal customer for another. The customer representative handling Chernicoff’s concern should have been properly trained so as to not alienate long-term loyal customers. This kind of training is central to one of Kobie’s ‘Five Es:’ Execution (the other are Enterprise, Engagement, Economics and Enablement. This situation proves that loyalty done right is about much more than just timely and relevant offerings. It’s about having the right corporate culture – beginning with C-level buy-in right through to the proper training of call-center staff and sales-floor associates.
As I see it, AT&T failed the ‘Five Es’ test in two critical ways:
1. Execution: This deals with a loyalty program’s rollout. AT&T did not recognize the importance of its long-term customers.
2. Enterprise: This speaks to the need for C-level buy-in or top-down corporate culture executive support. Arguably, AT&T failed in this regard. Otherwise, its customer service representatives would have known that ill-chosen words could drive away loyal customers- and handled Chernicoff’s concerns more thoughtfully.
Of course, this doesn’t mean all customers are created equal, new and old customers do have different brand value. That’s why segmenting customers based on their relative worth is so important – a topic my colleague, David Andreadakis addressed in a blog, Financial Services Loyalty Programs in Perspective: The Path Toward Engagement Success. All brands and loyalty programs deal with highly-engaged, moderately-engaged and least-engaged customers, but segmenting should never offend the customer and often that comes down to the right messaging, delivered on the right channels at the right time.
My advice to AT&T (yes, I am a customer too): before summarily reducing or ending longtime customer perks (such as upgrade fee waivers), review your customer data looking for opportunities to optimize execution and consider customer flexibility. Thoughtful use of loyalty program tiering can also help: when customers are close to a higher tier but do not have quite enough points to reach it, letting them “pass” – even if program rules must be altered – can significantly boost loyalty. The same logic applies with waiver fees. If a long-term customer asks for the continuance of a waiver policy, it’s the responsibility of the brand to either
- Grant the request as a special favor, making the customer feel valued.
- Decline the request, but let the customer down gently and offer a new perk to replace the older one.
Corporate culture – particularly at giants such as AT&T – can easily slip into auto-pilot, running through the motions of governance and customer service without considering how those actions and interactions affect customers. One of the keys to generating long-term loyalty though, is making those customers feel special. It’s about letting them know their business matters, not just in a strictly monetary sense, but in terms of a genuine relationship between two parties that seek something from each other. Finally, combining business intelligence with a bit of humanity drives far greater loyalty than essentially telling longtime customers they’re not as important as new ones.
Hopefully these lessons will resonate with telecoms and other brands – whether it’s the New Year’s resolution season or not.
What are some other member engagement tactics and approaches that telecoms could adopt so long-term customers like David Chernicoff don’t feel slighted (and tell the world about it)? Share your insights in the section below or email us at info@kobie.com.
