“May you live in interesting times” (Paharia, 2013, p.1).
Rajat Paharia’s chapter one of How to Revolutionize Customer and Employee Engagement with BIG DATA and GAMIFICATION Loyalty 3.0 is split into 3 segments, The Three Faces of Loyalty, The Road to Loyalty 3.0, and We Live in Interesting Times. This chapter is filled with many marketing insights and research giving scope to the current landscape of consumer and company relationships and how it developed to this current state.
First, in the Three Faces of Loyalty, Paharia begins with questioning the definition of loyalty within businesses. He then defines this in The Road to Loyalty as 3 levels, Loyalty 1.0, Loyalty 2.0, and Loyalty 3.0. Loyalty 1.0 is the most basic state of modern-day loyalty programs from businesses such as “…frequent-flyer programs, cash-back credit cards, and “buy ten get one free” punch cards from local sandwich shop…” (Paharia, 2013, p. 12). Loyalty 2.0 levels up in the 1990s, with 1-1 marketing. Businesses focused on expanding and redesigning loyalty experience with personalization and segmentation, this takes the form of email and direct-mail campaigns. This found substantial success until the rate of businesses that jumped on the trend ruined the overall experience for consumers leaving them overwhelmed, disengaged, and very annoyed. Onto Loyalty 3.0 which Paharia describes in three components of one equation, Motivation, Big Data, and Gamification. By finding the right combination of these three you are able to have your business reach Loyalty 3.0. Loyalty 3.0 can be used to connect to employees, customers, and partners making them more engaged and excited about your business, bringing a sense of true loyalty.
The Four Tiers of Loyalty are described by Paharia as Inertia Loyalty, a marketing plan to make a customer dread leaving your business instead of being excited to stay. These customers stay loyal to your business but, the only reason for that loyalty is because leaving or finding another business to buy from is simply too inconvenient. Mercenary Loyalty is like it sounds where that business is buying a customer's loyalty instead of truly earning it. This is the most traditional brute-force method that most brands use because of its previous success. However, we now have a culture shift of consumers wanting to buy from companies with the same or similar morals and values as the places they do business with making Mercenary Loyalty lose its effectiveness. True Loyalty, this is when a customer will continue to choose to do business with a brand even if its competitors are better options. This usually happens through an emotional tie or stake with the brand that the consumer is loyal to. This is a good and attainable goal for all brands. Cult Loyalty is similar to True Loyalty where the consumer has a deep emotional stake in a brand but, instead of a consumer being like-minded they believe the brand to be a core part of their identity. This is nearly unattainable through artificial means and can be dangerous for a business when something goes wrong, but it is a great place for your business to be.
Paharia then goes on to write about the current state of marketing in the overstimulating loud world we live in. He notes the shift of morality from the patriotic ideals and physical work of the Baby Boomer generation to the self-actualization and digital culture of Generation Y, Millennials. Understanding the importance of demographics is vital to marketing your brand and understanding the mindset of your target audience is how you can start your brand's journey to Loyalty 3.0.
“But as for you, O man of God, flee these things. Pursue righteousness, godliness, faith, love, steadfastness, gentleness.” (English Standard Bible, 2001/2016,1 Timothy 6:11). When taking the path to achieving True Loyalty from consumers, as Christians, it is important that we give consumers the option of buying from a brand that pursues righteousness, godliness, faith, love, steadfastness, and gentleness. We live in a world that doesn’t believe in those ideals or if they should exist they cannot be successful, but just showing those around us that there is another option can spur True Loyalty.
References
English Standard Bible. (2016). Literal Word. https://esv.literalword.com/ (Original work published 2001)
Paharia, R. (2013). Loyalty 3.0: How to Revolutionize Customer and Employee Engagement with Big Data and Gamification. McGraw Hill Professional.
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Kat’s Soliloquy
I am very excited to read Loyalty 3.0 and learn more about Affiliate and Brand Loyalty from Mrs. Regitz. Brand loyalty is very interesting to me as I was raised in a rather low-income household, my mother worked three jobs while attaining higher education when I was a child. While we often idealized many name brands and used big names to describe many of our items (i.e. Kleenex, Clorox Wipes, Tylenol) we usually bought the cheapest option when shopping. As I have grown older I have seen a shift in my family buying name-brand products, however, this is mainly the case when the name brand has shown itself to work better than its competitors or it is a big money purchase. Otherwise, we saved money for something better later. I guess this is the reason brand loyalty is so intriguing to me, in general, I would say the types of loyalties I have (towards businesses) are either Inertia or Mercenary. I love going to Starbucks with my friends, but if I was alone I probably would have never gotten a drink, even if I wanted a drink. I will say when directly faced with the option of Dunkin' or Starbucks I would choose Starbucks as it is the most popular among my peers.
I see many around me with Cult/True loyalties to brands like Taylor Swift and Starbucks, and I simply do not hold the same passion for specific brands when I buy. When I buy luxury or higher-end goods (something priced by its name) I do not hold animosity towards competitors, in fact I tend to buy from a different store the next time to experience something new.
When I shop I do prefer buying the best version of what I am getting, for example, I always buy hardcover books especially if it is signed, but that is not a brand nor loyalty, it's preference. I don’t write this out of a sense of superiority nor with the intention of sounding smarter or more reasonable than those who do hold True/Cult Loyalties. It just is the only time I buy a brand name specifically for the name is because I heard from others (online or in person) that it is the best version to buy. After the initial purchase I will rarely go back to a brand based just on emotional experience, usual my "loyalty" is based on external factors, how well it works/price.
Soliloquy over, please excuse improper grammar this is written directly from freeform thought (I know dangerous past times)
As a treat have a picture of true loyalty... according to google
