So you’ve been a loyal Delta Airlines customer for 10 years, travelling almost 300,000 miles. You’ve chosen it over other airlines even when Delta’s flight options require one- or two-stop layovers. When a competitive airline’s price was lower, you remained loyal to Delta and paid the extra fees.
You’re a loyal customer.
Your loyalty earned you Silver, Gold and ultimately, Platinum status. You were ushered into the airport via priority check-in lines, checked your bags for free, received free upgrades, and boarded the airplane ahead of others. You were given a priority hotline for requests and complaints, and received priority responses. You were a king among travelers.
Until you weren’t.
You took a year off from traveling to relax a bit and fulfill a life-long passion to research, write, and publish a book. At the end of the year, goals accomplished, you polished off your passport and carry-on bags, and resumed booking travel. All is great, except you’re no longer the king of travel; you’re one of the kingdom’s serfs.
After spending tens thousands of dollars with Delta airlines and Delta Sky Clubs – using a Delta credit card – you’re reduced to a nobody, sitting at the back of the plane keeping the lavatory company. Y
ou take your place at the back of long security queues; you pay for your checked bags and you stand by as various levels of VIPs are allowed priority boarding. You’re finally granted the privilege of boarding the plane, only to discover that there’s no more room in the overhead compartments for your carry-on baggage, so you’re forced to check it and lose more time at the airport.
How Quickly They Forget Us
I included Delta airlines in this story because it’s my personal experience; however, this could very well be the story of any person and any airline. In fact, it could be any hotel or other business that chooses to value customers based on short-term profit vs. long-term value.
This is nothing new, but when faced with the reality that you’re no longer considered valuable, regardless of the loyalty shown – and dollars spent – over past years, the practice is an alarming reality check.
It seems that for top brands, loyalty is less about Customer Lifetime Value (CLTV or CLV) and more about “what you have you done for me lately?”
It’s emblematic of a wider customer experience issue within the corporate world: Focus on short-term gains. Consumers are incentivized to support short-term revenue goals, often at the expense of building long-term business value.
In its basic form, CLV is a prediction of value of future net profits earned from a specific customer but there’s more to the lifetime value of a customer than his or her purchases.
It must include the future revenue earned from customer advocacy. Someone who purchases less may have greater value to a business than someone who purchases more, if the advocacy of the person who spends less drives greater convertible leads into the sales funnel. This is a concept that Danny Brown and I explore in our book Influence Marketing.
Loyalty vs. Advocacy
There’s a big difference between being a loyal customer and being an advocate, a differentiation brand managers would be well-advised to remember. Loyal customers offer their loyalty for the moment, not for life. Loyalty is often earned through various gamification tactics, such as temporary status granted based on number of miles flown this year.
Loyalty is a reciprocal concept; it’s given provided that it’s also received.
Customer advocacy, on the other hand, is achieved when a customer is provided with an excellent product that suits their needs, and is made to feel valued every day, not just when it suits the business. Advocates will espouse the virtues of brands, even when the product or service fails to meet expectations 100% of the time. Loyal customers will do so when the experience calls for it or when gamified to do so; however, the glue that keeps them purchasing is thin.
Delta continues to offer me a product that suits my needs and travel schedule; however, at this point, I’m not an advocate. After 10 years and 300,000 miles, I do not recommend Delta. I recommend whatever airline suits your needs at the moment you need to make travel arrangements. I will continue to fly Delta provided that its schedules continue to suit my needs but when another does, I’m happy to jump ship, er, airplane.
If the business is not going to remain loyal to me, why I should I remain loyal to it?
We Have Options
As my history of loyalty and dollars spent is no longer appreciated, I really have no reason to choose Delta. In fact, I have every reason NOT choose Delta for the numerous flights I’ve purchased and plan to purchase this year. I can choose American Airlines or any number of other options; I will wait in the same long queues, board last and pay for my checked bags. I will earn the same short-term status with them that I will with Delta this year, and earn the same perks, since I’ve been effectively “reset to zero.”
The fickle nature of these loyalty programs may be doing more harm than good in the long run. They provide the option for consumers to seek and consider other brands instead of evolving them from temporarily loyal customers to permanent brand advocates.
Sensei Debates: Delta Airline’s Disposable Customers. How effective are short-term loyalty programs? How loyal do you remain to businesses whose loyalty to you is short-term? Is there more value in customer lifetime value than short-term sales jumps? Join the discussion in the comments below.
Feed Your Community, Not Your Ego
Image Credit, Hyougusih via Creative Commons