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Going Beyond All-You-Can-Eat In Loyalty

When consumers think of loyalty programs, they typically think of racking up miles, or frequenting a business in exchange for rewards, perks or freebies.

No matter what business you patronize, there is a good chance that it is offering some sort of loyalty incentive. In fact, many argue that loyalty programs are so prevalent nowadays that they are losing some of the initial qualities that attracted consumers to them back some 45 years ago. Namely, that feeling of being treated special in exchange for the customer’s ongoing business and continued loyalty. Today, some loyalty programs choose not to even offer rewards. Instead they just provide the concept of receiving lower prices. Many grocery store chains have the regular price and then a loyalty member price. Sale prices are reserved just for members of their loyalty program.  Your information and transaction histories are exchanged with the grocery store for a slightly lower total at the checkout counter.

 

Loyalty programs have certainly evolved.

Many companies are shifting away from traditional rewards and offering experiences and other perks instead. The restaurant chain, Olive Garden, found that it’s “Never Ending Pasta Bowl” promotion was by far the most popular. So it decided to take it a step further and last month introduced the “Never Ending Pasta Pass.” The pass allow customers to enjoy all-you-can-eat pasta as many times as the customer wishes for a period of up to 7 weeks. The offer also allows the customer to extend some of the pass’s perks to as many as 7 guests dining with them. Olive Garden made the offer exclusive by offering just 1,000 passes through their website, at a cost of $100 each.

 

They sold out completely in just 45 minutes.

Some may view this as a loss leader promotion. However, according to an article in USA Today, the restaurant chain came up with this promotion as it wished to provide a VIP experience for some of its most loyal and profitable customers.

 

Similar to the Starbucks metal gift cards that sell out annually, the Never Ending Pasta Pass offers Olive Garden’s most enthusiastic customers the opportunity to enjoy a VIP experience as many times as they like. It also generates instant (and quantifiable) revenue, while encouraging the pass holder to bring guests. This clever addition helps generate more revenue with each additional dining partner. In addition, a promotion like this (obviously) can generate press, blog articles and social media buzz. Olive Garden even teased consumers who were not able to purchase one by dangling carrots of extra passes that will be handed out through social media properties.

 

What do you think about adopting such a program as a car dealership?

Imagine offering a limited quantity season long car wash pass that includes some service perks over and above what you would normally do for a customer. Or some other privileges, while also extending discounts to the customer’s friends and family members that bring their vehicles in with them.

 

In general, people like to feel special. Whether it’s showing off a metal gift card at Starbucks, laying down the Never Ending Pasta Pass at Olive Garden, or getting an on-demand car wash without waiting. When creating incentives for your loyal customers, thinking outside the box can make them feel very special while providing a reason for them to bring new customers to your store. And that’s one of the most important attributes that any loyal customer brings to any business – more customers.

Views: 232

Tags: CRM, customer, experience, garden, loyalty, olive, perks, program, retention, rewards

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Comment by Tom Gorham on October 25, 2014 at 6:09pm

Great article Mike but I tend to be ambivalent about "loyalty programs" in general.  I see nothing wrong in rewarding your most loyal customers (people DO like to feel special), but I think we first must earn that loyalty every day by wowing the customer with great customer service.  If you don't do that first, loyalty programs are nothing more than buying your customer's continued business.  I don't consider that "loyalty". I consider it short-term profit from people who will continue to be loyal as long as you reward them.  I would prefer a customer who comes back repeatedly because they love your store.

That said, I do believe in rewarding "advocates"...  those who spread the word about your dealership and refer others to your store simply because they are sold on YOU!  I'm just not sure you reward them materially.  I think it is best to reward them by treating them as royalty every time they come in your store.

Comment by Ralph Paglia on October 25, 2014 at 5:08pm

Great post, Mike! I especially like the advice about being creative when developing owner loyalty programs... With so many resources and the importance that cars have to most people, we should be getting creative when it comes to these programs.

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