Introduction
Throughout Chapter 1 of Loyalty 3.0, Rajat Paharia introduces us to the idea of Loyalty and Loyalty Programs. There are many ongoing issues with the successes and failures of certain Loyalty Programs, including the rise of technology and distraction, and the commitment of consumers to companies.
Types of Loyalty
As many of us know, businesses and brands desire loyalty (both customers and employees) and there are several ways in which they attempt to gain them. Although they spend millions, even sometimes billions on methods in order to gain loyalty, it rarely works how they want it to. There are a few different types of loyalty based on advancements in technology and culture in general. They are Loyalty 1.0, 2.0, and 3.0. Loyalty 1.0 is more basic and includes the more simple forms such as BOGO deals, punch cards, etc. They often feel fun and exciting at first, but easily begin to feel unattainable for customers. Loyalty 2.0 includes more email and direct mail marketing, and this is where companies began to look more at customer data in order to gain the right angle. Ultimately, this form became too busy and noisy for a customer when viewing their inboxes. Lastly, Loyalty 3.0 is more of what we utilize today, with things like advanced data and technology. There are three elements to this: Motivation, Big Data, and Gamification. According to Paharia (2013), “Loyalty 3.0 has three major enabling components […][and] By leveraging these three components together, we can make our customers, partners, and employees more engaged, more active, and truly loyal” (pp. 12,13).
Tiers of Loyalty
As discussed in Chapter one of the text, there are 4 types of Loyalty that are referenced when discussing loyalty programs within companies: Inertia, Mercenary, True, and Cult. Inertia Loyalty is described as a program where it is more inconvenient for a consumer to opt out of the loyalty program than to remain part of it. This could be something like Amazon due to the lack of competitors with their kind of convenience. Mercenary Loyalty is when businesses are more focused on “bribery”, with the lowering of prices and free items. True Loyalty is where customers get attached to a brand for more than convenience–they have a true emotional attachment or deep connection to the brand because they truly like it. Cult Loyalty is the point where consumers consider themselves “one” with the brand, follow it closely, and have consistent interaction with the brand.
Today’s Culture
As many of us know, we live in a time where humans are more easily distracted than ever before. A study by Science Direct (2021) found that smartphones are a direct distraction from more important activities (work, studying, etc). Similarly, Paharia discusses the many distractions that people are faced with, especially with websites, social media platforms, and technology in general. It has changed how businesses operate and how the workforce operates. It has decreased the engagement and productivity of individuals in their jobs and lives, creating a hinderance to all aspects of the economic world. There is too much circulating in the brains and lives of those who are influenced (even subconsciously) by media.
Conclusion
When reflecting on this chapter, I have thought about a lot of real-life experiences that correlate with points in the textbook. There are several businesses that I am loyal to on all different levels, and some loyalty programs I favor over others, such as the Joe Beans punch card or American Eagle’s reward program. As I also reflect on this chapter in a Biblical sense, I like to stop and think about how, similar to out loyalty to a brand, we should remain loyal to the word of God. One of my favorite verses that talks about this is 1 Kings 18:61, which states “”Let your heart therefore be loyal to the LORD our God, to walk in His statutes and keep His commandments, as at this day”.
References
New King James Version. (2011). BibleGateway.com. https://www.biblegateway.com/versions/New-King-James-Version-NKJV-Bible/#booklist.
Rajat Paharia. (2013). Loyalty 3.0 : how big data and gamification are revolutionizing customer and employee engagement. Mcgraw-Hill Education.
Troll, E. S., Friese, M., & Loschelder, D. D. (2021). How students’ self-control and smartphone-use explain their academic performance. Computers in Human Behavior, 117, 106624. https://doi.org/10.1016/j.chb.2020.106624
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