Punishing Loyalty: Rewarding First-Time Customers

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Let’s face it: Nothing says “We value our longtime customers” like making a discount available only to first-time customers. .

Let’s call it the First-Time Flyer approach: instead of encouraging loyalty among customers by rewarding them for it, the First-Time Flyer approach seeks to reward new customers for abandoning one of their competitors.

The mindset which focuses on gaining new customers by imposing costs on long-established ones is widespread.

You call an internet service provider to arrange web access in your new home or apartment. It’s explained to you that as a first-time customer you are eligible for a special discounted rate, one not available to those chumps who have been customers for as long as there’s been an Internet.

The next time you visit your local grocery store, consider the “15 items or less” sign above the check-out. Set aside that it should read “15 items or fewer“: the mindset encapsulated in such signs is crystal clear: “We aim to reward those the most who are profiting us the least”.

Imagine shopping at a grocery store where such signs are replaced with ones which read “Customers Shopping With Us For Three Years Or More”. I’d wager that such a sign would encourage first-time customers to become longtime customers. (I’d also wager that the novelty of such a rewards program would prompt some customers to take pictures of such signs and share them on social media.

Then you’re really in business.

Return to daviDDeeble.com or watch my most-recent performance at the Comedy & Magic Club in Hermosa Beach.

Small Coffee Shops Adopting The Fee-Based Business Model?

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Look around most coffee shops and you’ll see two types of customers. Let’s call them the Cuppa Coffees and the Cappuccinos.

The Cuppa Coffees are older and more likely to be male. They use terms like “tall” and “skinny” to describe their ideal secretary, not their coffee-based beverage. Even the term “coffee-based beverage” is alien to them. They drink coffee – and they’re lifers.

The Cappuccinos are younger and more likely to be female. Their favorite coffee-based beverages are more likely to be short stories with calories. They use terms like tall, grande, venti and skinny and are more likely to have an unhealthy relationship with caramel.

Lately I’ve noticed several small, individually-owned cafes try to increase their revenues by transforming the Cuppa Coffees into Cappuccinos. How are they going about this? By serving first-rate cappuccinos, world-class lattes and the kind of drip coffee one expects at a rural gas station. The message is loud and clear: if all you want to do is have a cup of filtered coffee you are not welcome here.

Starbucks – and larger coffee franchises generally – understand that most of the people who make the transition from filtered coffee to pumpkin spice latte have already done so. The small coffee shops I describe, on the other hand, seem to be adopting the fee-based business model of airlines: lowering the overall quality of their product in order to incentivize customers to pay fees (for carry-on bags, extra legroom, etc.)

Will it work? Leave your comments in the section below.

Return to www.daviDDeeble.com or watch me perform my Unnatural Act.