How to encourage customer disloyalty, or how not to be customer centric
I recently left my gym in central London, part of a big red chain. Don’t get me wrong, I didn’t cancel because I wasn’t using it; I went there nearly every day for the last 7 years. It changed my life for the better. I was a big advocate of my gym to others.
But what happened next let me down and made me feel differently about a company I had actively promoted. It’s a prime example of how to encourage customer disloyalty.
It’s all too easy to overlook loyal customers
Not long after cancelling my membership, I was sent a ‘reactivation offer’.
“We’d love to welcome you back with open arms, so we’ve pulled together something special just for you. Reactivate your membership now and you can choose between; a Polar FT2 Heart Rate Watch, 1 month of membership, a weekender holdall, an iPod Shuffle, Mizuno Running Shoes, some Bluetooth Wireless Headphones, a Breville Blend-Active, a Clock Dock Radio for iPhone 5, 5s, 6, 6 Plus & Touch 5 or a £25 Marks & Spencer Voucher.”
This made me sad. Not once during my 7 years with my gym did I receive any recognition or incentive for being a loyal member for such a long time. Nothing, not one simple ‘thank you, we appreciate you’, no offers, no treats, nothing to make me feel valued. The only communication I received was an annual notification that my fees were increasing, ‘refer a friend’ offers and a satisfaction survey. During my membership, I invested almost £30,000 (gulp) with them on monthly fees, weekly personal training and kids’ swimming lessons.
Ocado reward me on the anniversary of joining them with voucher for a free bottle of wine or box of chocolates to the value of £10. £10 a year, that’s all it takes to make me feel like a valued customer. Even Parkrun send me a happy birthday email. It’s not hard or expensive to reward your loyal customers and make them feel warm and appreciated.
Why should loyal customers miss out on all the good stuff?
Yet what my gym seems to want to do is reward the disloyal ones, the ones who leave them. Clearly what I should have done is cancelled my membership every year, taken up the reactivation offer and benefited from the free gifts above. And felt more valued in the process.
A few years ago, we ran a study on Loyalty Personalities which identified that 1 in 4 are ‘Conditioned Switchers’. Offers like the one my gym made only encourage switching and lapsing. Why should loyal customers miss out on all the good stuff?
It’s important to acknowledge customer loyalty
I emailed my gym’s head office to let them know how I felt. They said they’d ask the manager of the gym I attended to get in touch with me. This surprised me. I clearly didn’t have an issue with the local on-site staff. I replied to clarify that my issue was with the company’s lack of loyalty policy and that head office deem it ok to reward disloyal customers who have lapsed but not their regular loyal gym goers.
The email exchange was escalated to a customer services manager who explained that senior management are looking at a reward programme that will be rolled out ‘in due course’.
“We recognise that this is something that’s desired by a lot of members. It’s very common in our industry, and others, to have new joiner offers, but we also recognise that it’s important to acknowledge loyalty.”
It is important to acknowledge loyalty. It makes customers feel valued, it generates goodwill, it makes them spend more, it makes them more likely to recommend and spread good news, it makes them stay longer. Customer centricity starts with valuing the customers you have day to day, not simply when they leave when it can be a case of too little, too late. Customer centricity is not about only incentivising new customers, making existing ones feel like they’re missing out.
Be more customer centric
My gym should have recognised my loyalty whilst I was a member. And my gym would have been better emailing me not a reactivation offer but a lapser survey to understand why such a long term high value member lapsed and what they could have done about it. What they ended up doing is lowering my opinion of the company, prompting me to write this blog.
The gym market is limited and I’m sure you can guess who the chain is. If you’re the Customer Service and Retention Director of this chain, let’s talk. We’ll happily help you be more customer centric and understand what your customers value, why they leave and what can be done to help them stay. Our blog, part 2 in our Fundamentals of Customer Experience series, addresses the evolution of the customer centric business and what defines each stage of development.
The sorry footnote
The footnote to this story is that a week or so after my exchange with customer services, I got another ‘reactivation offer’. Identical offer from them, identical sense of disappointment from me, but additionally, a sense of irritation that despite expressing my dissatisfaction, they are still emailing me the same offer.