Olive Garden’s Never-Ending Pasta Pass, which offered 10,000 passes granting customers 13 weeks of unlimited pasta for $100, generated significant chatter across news sites and social media last month. However, Sujay Saha, founder and CEO of experience consultancy Cortico-X, notes that generating interest isn’t the same as bringing in new brand-loyal customers.
Saha told CX Dive, “I don’t believe that the buzz is loyalty. Buzz gets people in the door once. Loyalty is what happens when they come two, 10, 40 times.”
Turning exclusive experiences into loyalty is a matter of execution — if things don’t go smoothly, the opportunity will be lost. Brands also need to understand how potentially expensive events can actually produce a return on investment, and leaders learn how to make exclusive rewards appealing even to customers who haven’t yet earned them.
Len Covello, CTO of loyalty vendor Engage People, notes that exclusive benefits are about status. Special perks, whether won through contests or accumulated rewards points, give customers a reason to engage with the company.
Covello told CX Dive, “It definitely drives behavior. I am going to perform these actions because I am looking for this status symbol and the exclusivity that you get with that.”
The economics of an exclusive experience are no different from the economics of issuing loyalty points, according to Covello. Each kind of reward costs the company an associated dollar value.
For businesses that franchise, part of the execution is corporate ensuring franchisees are ready to deal with the short-term costs for the long-term payoff, according to Saha.
The ROI from the pasta pass isn’t the $100 it costs, according to Saha. It’s the relationships the promotion builds with customers, including pass winners who keep coming back to dine at full price and onlookers who were drawn into Olive Garden’s loyalty ecosystem.
By definition, not everyone can be part of an exclusive experience. Many of a given brand’s most loyal customers will never win a contest or reach the highest rewards program tier — but there are other ways to make them feel included. A flashy promotion like the pasta pass is great for getting attention, but it doesn’t create a big tent to welcome in potential customers or reward loyalists, according to Saha.
Brands who want to reward a large share of their biggest fans can invest in smaller events. The key is to understand your customer base and what they want, Saha said. Loyal customers may not necessarily want their own equivalent of free pasta. They may be more driven by early access to information about upcoming products or an opportunity to test a potential future release, such as getting exclusive marketing insights.
Tiered loyalty programs can be a good way to combine exclusive and attainable rewards. “I think as long as you’ve got tiers, it creates that ladder effect of, ‘Okay, I’ve moved on from the first tier to second tier, and I’m aspiring to get to the top tier,” Covello said.
The goal across all of these rewards is to build the emotional loyalty that transactional rewards can’t match, according to Covello. These are the loyalty rewards that will turn customers into fans. If you can do experiences right, that’s something that creates true loyalty and true memory with the brand, Covello said.
For instance, airlines and hotels offer status or the ability to get front of the line services, which drives true aspirational loyalty from users. It’s that fear of missing out piece that they want to be a part of, Covello noted. Experiences like these can be lofty, but they should still be attainable, and companies can offer smaller, more readily available perks that build emotional connections, much like execution issues at McDonald’s.
They can be simple, yet effective.
