June 10, 2013
BrainTrust Query: In the Loyalty Marketing World, Time is Treasure
Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.
You’ve probably heard it said that people have three principle assets to contribute to an organization or cause, their "time, talent, and treasure." Too often, the "treasure" simply equates to "my money."
Listening recently to a speaker I respect sparked a new understanding of this familiar word trilogy. The speaker made the point to say that each of the three components constituted real treasure and the treasure of the highest order was our time.
Our treasure is our time. What could this mean for loyalty marketing?
The most obvious time-savers commonly offered by loyalty programs to higher-tier members read this way:
- Allow me to board your airplane before others.
- Let me check out of your hotel later than others.
- Offer me free shipping for my online purchase.
- Get me into a shorter hold queue when I’m calling the contact center.
To make loyalty programs more contextual and relevant to consumers, it helps to factor in the importance of the intrinsic motivations that can move people at a lower cost than higher priced extrinsic (tangible) rewards.
Many studies support the idea that discounts and price reductions offer only fleeting satisfaction for consumers. A favorite article of mine from the Journal of Consumer Psychology, "If money doesn’t make you happy, then you probably aren’t spending it right," particularly illustrates that spending money on experiences creates the greatest long-term impact for people.
Framed in this viewpoint, you can better understand how rewards that stimulate better customer experiences, make people feel recognized, and deliver time savings are something to emphasize. Here are a few examples that come to mind, and I’m sure you’ll have more:
- If you’re a wireless provider, recognize that I’ve been with your company for over five years, have paid a consistent amount on time each month, and reflect that in your service level in the store.
- If you’re an airline, send me a promotional code based on my recent flight patterns or tier and allow me quick and easy access to in-flight wireless service rather than going through the same burdensome process on each flight.
- If you’re Apple, stop asking me if I am a business account if you don’t plan on offering me a specific set of services to help me out. That failure actually wastes my time and erodes my loyalty.
- If you’re an online retailer, don’t be afraid to copy the best ideas of your competitors. One-click shopping saves me time and makes my shopping experience better.
BrainTrust
Recent Discussions
Discussion Questions
What do think of the potential of time savings as a loyalty driver? Do you believe that time-saving rewards can replace monetary ones?
Poll
The examples mentioned in the article are not always about time-saving, but they are consistently good examples of how to delight the customer by exceeding expectations. Some of the benefits are convenience-based, others are based on the idea that frequent customers merit special recognition.
But the common theme is that these are not pricing-based ideas. Many retailers and service providers mistake deeper discounts for true loyalty programs, but price incentives only encourage the customer looking for deals to shop around and cherry-pick. It’s time for more merchants to follow the lead of service providers in rethinking the very meaning of their loyalty offers.
If the time saved on a particular activity is of value to the consumer, then offering that time saver as a reward can build loyalty. Offering a faster way to use online services on an airline is not a benefit for consumers who do not use the service. Offering choices of rewards may be a better way to match the rewards to the consumers.
Treasure—in terms of assets—can also be one’s social network.
From a B2B perspective, this works in the agency world of course, when it comes to pitches and new business. But it also works in the corporate world with retailers and talent recruitment. Finally, social graphs are being monetized on consumer-facing sites like Twitter, as well as financially assessed on sites like Klout.
Maybe the fourth “T” should be Tribe.
Time is finite. Offering rewards that save time have value, sometimes more value than saving money. The article highlights some excellent examples.
Time saving rewards do not have to replace monetary rewards. Both can be offered. Consumers could choose the reward that they find most valuable.
To be successful, reward programs need to offer items of value in exchange for continued loyalty. The programs need to have the highest perceived value for consumers with low actual costs for retailers and brands. Rewards that save time often fit this criteria.
Time is a big benefit for many shoppers. Can you imagine if Starbucks rewarded their best shoppers with a dedicated checkout? What about McDonald’s during the peak lunch hour rush? Shoppers want to be rewarded for their loyalty. Saving them time is a bigger reward vs. a small discount.
Lots of great things to think about here, not only in relationship to external customers, but also in regard to your internal customers.
The answer to the question of the value of time saving is that it all relates to what the person feels is scarce. Anything that is scarce has value. So to a person with lots of money or enough money, time is going to have more value.
I think most companies have gotten so far away from any real idea of service that this is all but a moot point.
The idea is fine as an idea, but the devil—as always—is in the details.
Let’s take the “board the plane” first idea as an example. I have literally millions of miles on (what is now) Delta. A couple of years ago I took an assignment that had me flying from Detroit (a Delta hub city) to Dallas.
The fare on American was half that of Delta, so I flew American. Within 12 months I was Executive Platinum on American, boarding just after the pilots, but I lost my status on Delta. So, when the Dallas job was over I found myself with Silver status on Delta, a company I have literally spent millions of dollars with.
Boarding right after my luggage I too thought time was a premium, but it needed to be combined with another metric like say total lifetime spend.
And, sticking to the airline example, how much individual loyalty to you build in your hubs when three quarters of the plane has the same status, but only a handful get some additional benefit such as an upgrade?
Sure the entire plane gets to board at exactly the same time—leading to total chaos, but all those Platinum fliers going back to coach don’t seem to understand the benefit that early boarding affords them.
The same thing is true in hotels. Most savvy travelers know how to get a late checkout, so what does loyalty really buy you?
As to whether time is worth more than money, not in these cases.
If time saving and customer recognition are in lieu of saving money, there is a formula for each shopper that takes into account the importance of each of these factors, and how much they are willing to trade off one to get another. Obviously, more price sensitive shoppers will require a much more dramatic time and recognition benefit to offset their need to get the best price.
While each shopper has their own DNA when it comes to these trade offs, customer segmentation can help determine which shoppers are driven by the various elements of convenience, time, recognition, etc.
Most definitely! The human experience that connects with us emotionally will far outweigh a financial token. Time in today’s harried world is a premium for all of us and any brand that extends their promise to save us time AND make our experience that much more pleasant will overshadow any impersonal chit of paper.
Time is our most expensive commodity and the only thing that cannot be replaced. In recognizing that, companies that offer true value in time-savings and high customer service levels will win. It frustrates me that every time I call my bank I have to enter in the same qualifier information, but I am pleased at the level of service I get when they see I’ve been a member for 11 years.
I don’t know that saving me 5 minutes is better than me saving 20%, so I don’t know if they can be looked at as a pure exchange, but rather finding a balance in which the two can work together would be the ultimate loyalty reward.
I am struck by our industry’s response to loyalty is often “telling” someone what they SHOULD value vs. “asking.” As a shopper, being told I am now able to avail myself of “rewards” that are not of my own choosing or that I do not particularly hold in high regard does not incent me to act (or at least not in the way that is intended).
Let ME CHOOSE how I wish to be rewarded, compensated, recognized, etc. This is not “gift” that I am being given—it is something I have earned. I should not just “be happy you got something” (and be sure to send a thank-you note). I am making a business decision. Some of these decisions are worth THOUSANDS of dollars (airfare, weekly grocery, cars, etc.). I will be loyal to ME (not to YOU).
There is no question that time-saving benefits can not only be offered in lieu of discounts, but can also be provided at little or no additional cost to the merchant.
Of the examples stated so far in the comments, the one that is most dear to us all is in the physical retail store. POS checkout lines are still the simplest issue to address, that also has the highest potential impact on the customer.
I continue to see stores of all product segments (apparel, grocery, DIY, etc.) with poor real-time response at the POS. If I am a loyal shopper at the retailer, why is there not a “Premium Customer” POS terminal? This is so rare in retail today, around the globe. Why is this the case? Airlines, Hotels, and Car Rentals can pull it off effectively. Why can’t retailers?
Shoppers pay with: “The Three Shopping Currencies,” time, money and angst. Time is not elastic, money is. Hence, the fundamental rule that the faster shoppers buy, the more they will buy. They will buy faster when it is more convenient to buy faster. Now we are talking real “salesmanship,” a rare thing in the self-service bricks world.
It’s all about currency. Whatever that currency must be. The bottom line is that retailers want the customer to invest. This means that they must first get the customers attention (spend currency), get them to participate (more currency), lead them to commit (even more currency) and turn them into brand advocates (the most currency).
The brand itself will have to determine what that currency is, of course and no, it isn’t always money!
Yes, basically to drive loyalty you need a benefit, and for a retailer, it cannot always be monetary incentives since it erodes margin. Convenience and time saving can actually help maintain margins against low price pressures from competitors. If you compete on monetary incentives only, you will just to attracting loss leading customers.
Great post Bill. Time is not only among the scarcest of resources, but for a lot of people and businesses it is the most valued and an area that can present a high degree of leverage.
Something all of need reminding about from time to time is that the groups of people we are often discussing in these posts are a small percentage of the population.
In this case, the actual group of frequent flyers is probably 7% or less of total population. In fact, I saw a statistic in the USA Today (today) that said only (to me) 37% of people surveyed in the US traveled via plane more than 1x per year. Like many of my colleagues in this discussion, I travel more than I would like.
We’ve got to keep that in mind when we dissect the travel experience because not everyone is a savvy as we describe, therefore the tactics that can be applied are vastly different.
Time is our most precious commodity and as someone who frequently finds it in short supply, I believe that time-savings can be a huge loyalty driver—especially for those consumers who value their time highly.
As a specific case in point, I was speaking recently with a partner in one of the top accounting firms about the effectiveness of, and trade-offs in, price matching programs. Professionally, he might bill his clients at a rate of $350—$600 per hour. He was caught in line at the grocery store behind a shopper who was redeeming coupons that were going to save her some money on her purchases, say $20 over the entire contents of her shopping cart. The issue was that for each individual product, the cashier had to verify the flyer cut-out evidence that the shopper presented for the price match, fill out a form, and staple and store them. He recounted to me how frustrating he found it to be caught in line behind the shopper, and that he was inclined to just give her the money she would save if it would enable the cashier to get to ringing in his purchases. If the entire process took 10 minutes, the partner in question could value the time he spent in line at approximately $60—$100 (note: while this is what he might value his time at if someone were to pay him for it, this does not mean that he would pay the same amount to save that amount of time—but let’s use it as a proxy for the sake of argument). The coupon-clipping shopper, on the other hand, likely values his/her time at something less than $20 for that same time period, since they traded that 10 minutes of their life for the $20 in savings.
If the grocery store came up with initiatives that would ave shoppers 10 minutes of time per visit to the store, one can see how the partner at the accounting firm might value them more highly than the coupon-wielding shopper, and thus more likely to reward the store with his loyalty.
There is no question that time is a powerful tool for influencing and motivating consumer behavior, particularly among business people and mothers, who—let’s be honest—have the purchasing power to rule the world of many brands. For example, last year I received a special package from Air Canada, recognizing that I had achieved million-mile status. I received a cool little model jet plane (assembly required) and a new membership card. But the real value to me was Elite Status for life, which means express check in from now on. That pretty much assures that my next million miles will be with Air Canada.
There is definitely potential for more time-saving offerings in the reward baskets of several loyalty programs, but not every Brand is equal when it comes to ease of delivery—some industries have far greater operational capability to deliver “hassle-free” perks. To replace a monetary reward, one would need to evaluate the brand/loyalty program’s overall loyalty value exchange.
We are becoming a Tap, Swipe, Click society within almost all age ranges. Millennials, who will strongly influence the future of our brands, want rewards that can be earned quickly and they over-index on Retail loyalty (according to Aimia’s 2011 Millennial Loyalty Survey). I believe the overall user experience will become more critical to brand success as consumers become more impatient and information more ubiquitous. Making the loyalty customer’s user experience more efficient through time-saving, hassle-free offerings will never be a bad thing.
While time saving is a great reward, what it really brings about is exclusivity. I think customers look at this as a privilege and gives them a feeling which one would associate with “luxury.” While time-saving rewards may not entirely replace monetary ones, there needs to be a good mix of the same.
More Discussions
Is Meta Committing to Retail via Meta Lab Stores, or Are Other Goals More Important?
Is Meta playing in retail, actually committing to retail, or looking for more data?Aerie Recruits Pamela Anderson To Highlight No-AI Models Promise
American Eagle’s Aerie banner has recruited former “Baywatch” star Pamela Anderson to broadcast the lifestyle brand’s…How Timely Is the Planned Lowe’s Website Renovation Focusing on Personalization?
Is Lowe’s being timely with its website reno, and is it right to be placed as…
The examples mentioned in the article are not always about time-saving, but they are consistently good examples of how to delight the customer by exceeding expectations. Some of the benefits are convenience-based, others are based on the idea that frequent customers merit special recognition.
But the common theme is that these are not pricing-based ideas. Many retailers and service providers mistake deeper discounts for true loyalty programs, but price incentives only encourage the customer looking for deals to shop around and cherry-pick. It’s time for more merchants to follow the lead of service providers in rethinking the very meaning of their loyalty offers.
If the time saved on a particular activity is of value to the consumer, then offering that time saver as a reward can build loyalty. Offering a faster way to use online services on an airline is not a benefit for consumers who do not use the service. Offering choices of rewards may be a better way to match the rewards to the consumers.
Treasure—in terms of assets—can also be one’s social network.
From a B2B perspective, this works in the agency world of course, when it comes to pitches and new business. But it also works in the corporate world with retailers and talent recruitment. Finally, social graphs are being monetized on consumer-facing sites like Twitter, as well as financially assessed on sites like Klout.
Maybe the fourth “T” should be Tribe.
Time is finite. Offering rewards that save time have value, sometimes more value than saving money. The article highlights some excellent examples.
Time saving rewards do not have to replace monetary rewards. Both can be offered. Consumers could choose the reward that they find most valuable.
To be successful, reward programs need to offer items of value in exchange for continued loyalty. The programs need to have the highest perceived value for consumers with low actual costs for retailers and brands. Rewards that save time often fit this criteria.
Time is a big benefit for many shoppers. Can you imagine if Starbucks rewarded their best shoppers with a dedicated checkout? What about McDonald’s during the peak lunch hour rush? Shoppers want to be rewarded for their loyalty. Saving them time is a bigger reward vs. a small discount.
Lots of great things to think about here, not only in relationship to external customers, but also in regard to your internal customers.
The answer to the question of the value of time saving is that it all relates to what the person feels is scarce. Anything that is scarce has value. So to a person with lots of money or enough money, time is going to have more value.
I think most companies have gotten so far away from any real idea of service that this is all but a moot point.
The idea is fine as an idea, but the devil—as always—is in the details.
Let’s take the “board the plane” first idea as an example. I have literally millions of miles on (what is now) Delta. A couple of years ago I took an assignment that had me flying from Detroit (a Delta hub city) to Dallas.
The fare on American was half that of Delta, so I flew American. Within 12 months I was Executive Platinum on American, boarding just after the pilots, but I lost my status on Delta. So, when the Dallas job was over I found myself with Silver status on Delta, a company I have literally spent millions of dollars with.
Boarding right after my luggage I too thought time was a premium, but it needed to be combined with another metric like say total lifetime spend.
And, sticking to the airline example, how much individual loyalty to you build in your hubs when three quarters of the plane has the same status, but only a handful get some additional benefit such as an upgrade?
Sure the entire plane gets to board at exactly the same time—leading to total chaos, but all those Platinum fliers going back to coach don’t seem to understand the benefit that early boarding affords them.
The same thing is true in hotels. Most savvy travelers know how to get a late checkout, so what does loyalty really buy you?
As to whether time is worth more than money, not in these cases.
If time saving and customer recognition are in lieu of saving money, there is a formula for each shopper that takes into account the importance of each of these factors, and how much they are willing to trade off one to get another. Obviously, more price sensitive shoppers will require a much more dramatic time and recognition benefit to offset their need to get the best price.
While each shopper has their own DNA when it comes to these trade offs, customer segmentation can help determine which shoppers are driven by the various elements of convenience, time, recognition, etc.
Most definitely! The human experience that connects with us emotionally will far outweigh a financial token. Time in today’s harried world is a premium for all of us and any brand that extends their promise to save us time AND make our experience that much more pleasant will overshadow any impersonal chit of paper.
Time is our most expensive commodity and the only thing that cannot be replaced. In recognizing that, companies that offer true value in time-savings and high customer service levels will win. It frustrates me that every time I call my bank I have to enter in the same qualifier information, but I am pleased at the level of service I get when they see I’ve been a member for 11 years.
I don’t know that saving me 5 minutes is better than me saving 20%, so I don’t know if they can be looked at as a pure exchange, but rather finding a balance in which the two can work together would be the ultimate loyalty reward.
I am struck by our industry’s response to loyalty is often “telling” someone what they SHOULD value vs. “asking.” As a shopper, being told I am now able to avail myself of “rewards” that are not of my own choosing or that I do not particularly hold in high regard does not incent me to act (or at least not in the way that is intended).
Let ME CHOOSE how I wish to be rewarded, compensated, recognized, etc. This is not “gift” that I am being given—it is something I have earned. I should not just “be happy you got something” (and be sure to send a thank-you note). I am making a business decision. Some of these decisions are worth THOUSANDS of dollars (airfare, weekly grocery, cars, etc.). I will be loyal to ME (not to YOU).
There is no question that time-saving benefits can not only be offered in lieu of discounts, but can also be provided at little or no additional cost to the merchant.
Of the examples stated so far in the comments, the one that is most dear to us all is in the physical retail store. POS checkout lines are still the simplest issue to address, that also has the highest potential impact on the customer.
I continue to see stores of all product segments (apparel, grocery, DIY, etc.) with poor real-time response at the POS. If I am a loyal shopper at the retailer, why is there not a “Premium Customer” POS terminal? This is so rare in retail today, around the globe. Why is this the case? Airlines, Hotels, and Car Rentals can pull it off effectively. Why can’t retailers?
Shoppers pay with: “The Three Shopping Currencies,” time, money and angst. Time is not elastic, money is. Hence, the fundamental rule that the faster shoppers buy, the more they will buy. They will buy faster when it is more convenient to buy faster. Now we are talking real “salesmanship,” a rare thing in the self-service bricks world.
It’s all about currency. Whatever that currency must be. The bottom line is that retailers want the customer to invest. This means that they must first get the customers attention (spend currency), get them to participate (more currency), lead them to commit (even more currency) and turn them into brand advocates (the most currency).
The brand itself will have to determine what that currency is, of course and no, it isn’t always money!
Yes, basically to drive loyalty you need a benefit, and for a retailer, it cannot always be monetary incentives since it erodes margin. Convenience and time saving can actually help maintain margins against low price pressures from competitors. If you compete on monetary incentives only, you will just to attracting loss leading customers.
Great post Bill. Time is not only among the scarcest of resources, but for a lot of people and businesses it is the most valued and an area that can present a high degree of leverage.
Something all of need reminding about from time to time is that the groups of people we are often discussing in these posts are a small percentage of the population.
In this case, the actual group of frequent flyers is probably 7% or less of total population. In fact, I saw a statistic in the USA Today (today) that said only (to me) 37% of people surveyed in the US traveled via plane more than 1x per year. Like many of my colleagues in this discussion, I travel more than I would like.
We’ve got to keep that in mind when we dissect the travel experience because not everyone is a savvy as we describe, therefore the tactics that can be applied are vastly different.
Time is our most precious commodity and as someone who frequently finds it in short supply, I believe that time-savings can be a huge loyalty driver—especially for those consumers who value their time highly.
As a specific case in point, I was speaking recently with a partner in one of the top accounting firms about the effectiveness of, and trade-offs in, price matching programs. Professionally, he might bill his clients at a rate of $350—$600 per hour. He was caught in line at the grocery store behind a shopper who was redeeming coupons that were going to save her some money on her purchases, say $20 over the entire contents of her shopping cart. The issue was that for each individual product, the cashier had to verify the flyer cut-out evidence that the shopper presented for the price match, fill out a form, and staple and store them. He recounted to me how frustrating he found it to be caught in line behind the shopper, and that he was inclined to just give her the money she would save if it would enable the cashier to get to ringing in his purchases. If the entire process took 10 minutes, the partner in question could value the time he spent in line at approximately $60—$100 (note: while this is what he might value his time at if someone were to pay him for it, this does not mean that he would pay the same amount to save that amount of time—but let’s use it as a proxy for the sake of argument). The coupon-clipping shopper, on the other hand, likely values his/her time at something less than $20 for that same time period, since they traded that 10 minutes of their life for the $20 in savings.
If the grocery store came up with initiatives that would ave shoppers 10 minutes of time per visit to the store, one can see how the partner at the accounting firm might value them more highly than the coupon-wielding shopper, and thus more likely to reward the store with his loyalty.
There is no question that time is a powerful tool for influencing and motivating consumer behavior, particularly among business people and mothers, who—let’s be honest—have the purchasing power to rule the world of many brands. For example, last year I received a special package from Air Canada, recognizing that I had achieved million-mile status. I received a cool little model jet plane (assembly required) and a new membership card. But the real value to me was Elite Status for life, which means express check in from now on. That pretty much assures that my next million miles will be with Air Canada.
There is definitely potential for more time-saving offerings in the reward baskets of several loyalty programs, but not every Brand is equal when it comes to ease of delivery—some industries have far greater operational capability to deliver “hassle-free” perks. To replace a monetary reward, one would need to evaluate the brand/loyalty program’s overall loyalty value exchange.
We are becoming a Tap, Swipe, Click society within almost all age ranges. Millennials, who will strongly influence the future of our brands, want rewards that can be earned quickly and they over-index on Retail loyalty (according to Aimia’s 2011 Millennial Loyalty Survey). I believe the overall user experience will become more critical to brand success as consumers become more impatient and information more ubiquitous. Making the loyalty customer’s user experience more efficient through time-saving, hassle-free offerings will never be a bad thing.
While time saving is a great reward, what it really brings about is exclusivity. I think customers look at this as a privilege and gives them a feeling which one would associate with “luxury.” While time-saving rewards may not entirely replace monetary ones, there needs to be a good mix of the same.