A look at the bigger picture of customer loyalty

Many of us spend our days focused on the small details that are essential to our jobs – as we should if we’re being conscientious and not secretly watching Mad Men mash-ups on YouTube. But there’s a problem with getting too focused on the small details (male CRMers: That’s a punch targeted at your extra-small “details”). The problem is that we can lose our sense of creativity – our ability to think of new ways to strengthen our CRM programs. Eventually, our loyalty programs lose their pull.

So try this: Read through this interesting piece that talks about the Four Types of Loyalty.

Okay, don’t. I’ll summarize it for you. (Sorry, Thomas, I’m afraid the summary still has lots of long words and hardly any pictures in it. Go back to doing what you love most.)

Anyway, this piece, written by Thad Peterson of Market Platform Dynamics, says customer loyalty is driven by the level of engagement between customer and brand (interest) and by the value the customer perceives in the product versus its competition (differentiable value).

So then he puts together the combo packages of instances in which a product has one attribute but not the other, both or neither. He identifies them like this:

Inertial – (low differentiable value/low interest) – Like the name implies, customers aren’t thrilled with the product or service and there are plenty of alternatives, but inertia keeps them from changing. Basically, for one reason or another it’s too much of a hassle to switch.

Functional (high differentiable value/low interest) – Things you don’t really take pleasure from having, but can’t find a good substitute.

Transactional (low differentiable value/high interest) – This is the most common loyalty feature – rewarding a customer at the time of each transaction involving a service or product.

Emotional (high differentiable value/high interest) – The ideal, and very hard to achieve, Peterson says. Think Apple or Nordstrom. (Yes, I have asked you to think. So sue me.)

So now that your mind has moved beyond the latest reward algorithm switch you’ve been considering, what’s resonating for you about your loyalty program – or gaming loyalty programs in general?

You can start to see how different it is for online casinos versus the bricks-and-mortar versions, can’t you? While you can picture someone in a remote area of the country putting up with a low-class casino since it’s the only one within 100 miles, that’s not going to work online. Or is it? Could you find a way to make it hard for a customer to leave, like banks and insurance companies do by getting a deeply entangled exchange of information going?

Functional may be the one area that is hard to imagine applying to the online world, but not entirely. There are some companies offering games not available elsewhere, and to a degree they can have nothing else going for them but the unique games and still draw customers.

Transactional? That’s pretty clearly what we all do, right? We encourage players to keep playing with our reward systems that are driven by transactions. But what about that emotional element?

An example from the bricks-and-mortar world might give a clue about how to think about this. A friend tells me that where he lives in the United States, there are several competing casinos run by Indian tribes. Many of the ads done by the casinos are just what you’d expect – photos of people with unnatural smiles plastered on their faces, delighted at winning a hundred zillion dollars in gold, and suddenly confident that attractive person in the background will play a fervent round or two of hide-the-salami later that evening. Nice fantasy, but pretty dated as an advertising tactic.

In contrast, one casino shares real-life stories of people having success at their place of business – not huge winnings, maybe five thousand dollars, but enough to get, say, a 70-year-old guy to talk about to the promotional people. You assemble enough of these, put a homey spin on it, and suddenly your casino seems like a place that all good, upstanding citizens in the community go every once in a while for a little rest and recreation. Eat a big Sunday breakfast, watch some football, drop some cash at the casino, go to bed, and get ready for work.

It may not be dazzling, but it’s thinking differently, and thinking of a way to elicit some emotion in your customers.

How about you? How would you think differently about your operation by looking at these options?

As said, all credits goes to the original author, Thad Peterson of Market Platform Dynamics. As for us, we promise we’ll revisit this way of looking at it sometime later. In the meantime… SAHANA TOVA!

P.S.: You know what they say about Vegas, right? That when you’re there for the G2E, whatever you do, even meeting us in person, stays in Vegas. So now all you need to do is contact us and set up a meeting. Beer is on us.

Okay, okay – we’ll split the tab, but only because you insist.

About iGamingCRM Blog

Shahar Attias, CEO www.hybridinteraction.com "Care to Make it Interesting?"
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4 Responses to A look at the bigger picture of customer loyalty

  1. That matrix is really helpful thank you! Great article.

  2. Seshadri A says:

    Good article. Relevant because most gaming companies are relying on the same software providers with little to differentiate the product offering and relying on similar key affiliate rings to drive the traffic. Social is not making it any easier either. Still we need to see how the operators use this matrix, or any other tool and create the much needed stickiness to the service.

    • You are more than right, Seshadri. Operators are not using enough of their influence over software providers to develop features that could assist them to personalize their offering, and instead rely on acquisition to provide them with market cap. Quite stupid, as they could have been making so much more money out of their existing players – EASILY.

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