What does it take to regain customers’ trust once it’s been shaken?
Dennis Armbruster, Editor at Large, COLLOQUY
Through a special arrangement, what follows is a summary of a study from COLLOQUY, provider of loyalty-marketing publishing, education and research since 1990.
Many companies rely on the expertise of their PR teams to lift them from a public crisis, yet in such situations they might do well to look to their loyalty marketing teams for their best insights and access to customers.
The following is some advice on how to use loyalty data to regroup and from a potential PR crisis:
Identify your ambassadors: When Starbucks announced it would change its Starbucks Rewards model to recognize dollars spent rather than visits, loyal customers broadcast their resentments across social media, which were then rebroadcast across mass media. The lesson: “Every member of a loyalty/rewards program is a PR representative for your organization, whether you want them to be or not,” said Jonathan Bernstein, president of Bernstein Crisis Management. Companies can use a strong loyalty strategy to draw customers back to a brand as well as amplify the organization’s key messages regarding the crisis.
Communicate directly and truthfully: After its failed attempt to shift from coupons to everyday low pricing in 2012, J.C. Penney could have sent loyalty members an apology, straightforward explanations and offers. Says Britt Beemer, founder of America’s Research Group, “When you run 38 percent of your customers off, you plead mercy.”
Says Gerard Braud, a crisis communications expert and head of Gerard Braud Communications, “The beauty of a loyalty program is your customer is telling you they trust you and they believe in you. Therefore, it is your pipeline to retain loyalty. It is also a pipeline to say you are sorry, if needed.”
Time carefully: While loyalty databases are crucial for fast communications and possible apologies, organizations should be careful how they use their rewards after an event. Mr. Bernstein said, “Wait until any immediate threat (e.g., e. coli contamination) is completely contained first, else you draw people in just to incur more damage.” Mr. Braud added that loyalty and reward initiatives developed after a crisis can appear to be “an act of desperation.”
- Loyalty Cures For The Business Black Eye: 3 Tips For Regaining Customer Trust, From Leading Crisis Experts – COLLOQUY
DISCUSSION QUESTIONS: What are the advantages and limits of tapping loyalty programs rather than overt public relations efforts to manage crisis situations? Which of the three recommendations offered in the article is most important in resolving crisis situations? Are there any you would add?