All kinds of businesses have loyalty programs -- you get discounts on gas if you regularly buy groceries, you get free flights in exchange for miles flown, you get points for coupons later. My recent experience with Godiva’s customer loyalty program, makes me wonder -- Why don’t nonprofits create loyalty programs for their supporters? Could a super creative and savvy nonprofit loyalty program be just the catalyst your organization needs? Could it help you better capture the attention of a group of people dedicated to your cause and then continue to build their trust over time?
A Case Study in Chocolate: How Loyalty Programs Work
Last weekend, I ran in to our mall for a few things. This included a stop at my local Godiva chocolate store. I had only been there three times over the past three years, but last month I was in and joined their customer loyalty program. It didn’t cost anything, and was easy to join at the register, so there you go. Why not?
My membership now entitled me to a a free chocolate each month. Hence my second visit (I was checking out whether it really worked). To my delight, I not only received a nice piece of free chocolate, they also gave me another small box of chocolates because, as the shop girl informed me, I had spend over $10 last month. During my previous visit (the day I signed up for their program), I bought a welcome home box for my sweetie. And, apparently, their rewards are progressive. “If you spend more than $20 this month,” she whispered conspiratorially, “you’ll get another gift next month. We hear it may be chocolates AND a tote bag!” And, like that, I was hooked.
“But, how can Godiva afford to give away so much free chocolate? Aren’t they going to lose their shirt in this economy?” you may be asking. Not likely, and here’s why. You see, this weekend is my second wedding anniversary. My husband and I have planned a romantic getaway. And, what spells romance like nothing else? Chocolate! So, if I choose to buy chocolate (and I’m already thinking about it, after all, those ladies at the Godiva shop were super cheerful and nice), where do you think I’ll go to purchase my tasty morsels? I could buy chocolate at a lot of places to be sure, but I now have a relationship (or perhaps a loose affiliation is a better description) with Godiva.
But, that’s not the end of it. What happens if I’m at the mall with some friends? If I don’t have my free truffle that month, I’ll drop by the Godiva shop. And, since I don’t want to be a schmuck and eat in front of my friends, I’ll offer to buy them some goodies, too. They may also want to how I have the inside scoop on free chocolate and, if I’m still a happy, loyal customer, I’ll tell them -- as I’m telling you -- all about it. More business for Godiva!
Godiva’s business strategy is actually quite simple. They are generating customer delight through free chocolate, and they’re hedging their bets on building long-term relationships with customers. It’s not about the ten dollars I spent last month. It’s the fact that over the past three years I’ve been through their shop three times. In the next three years, however, it’s pretty likely I’ll double, triple, or quadruple my number of visits. Instead of short-term revenue, they see me as an investment with value over the long haul and, because, I get free treats out of it, I’m willing to go along for the ride.
This is exactly how a loyalty program should work. Both sides benefit, and in particular, the customer side is having a lot of fun, on a regular basis, without a lot of hassle.
Nonprofits Don’t Sell Chocolate: But We Do Have Amazing Experiences to Share
So, let’s be clear, nonprofits are different than businesses, and don’t have the expansive resources necessary to launch a loyalty program on the grand scale of Godiva’s. Some of us may give gifts, or “premiums,” when people make certain levels of donations, or we may give volunteers a coffee cup during our annual volunteer appreciation month, but we don’t have products we can give away every day. So, what do we have?
We have experiences to share. With us, and through us, our supporters have the ability to feel the profound joy associated with helping others, the thrill of making a difference in a world where they may otherwise feel powerless, the deep satisfaction of knowing they have truly connected with their community. These experiences are not easy to come by, and they are much more prevalent in the social sector. I’d also argue that these experiences are much more powerful than a free piece of chocolate, however yummy it is.
So, I ask you -- How can we design nonprofit loyalty programs that are mutually beneficial, non-bureaucratic, and absolutely delightful for our supporters? How do we reward them for the relationship we have forged together? What encounters would they most treasure that would keep them coming back over and over again?
I think if we can answer these questions, we may be on to something. We may hold the keys to designing a loyalty program that blows others out of the water.
What if, like Godiva, we focused our energy on long-term investment over of short-term gain? Our loyal fans might do the majority of your outreach and marketing for us. We might not have to spend so much time and effort cultivating new supporters to replace those that have left via the revolving door. Our lives might be a little bit easier.