Practicing Random Acts of Retail Kindness
By Tom Ryan
According to a study coming out in the Journal
of Marketing, building true loyalty involves
not just continually pleasing customers but making them feel “grateful.” In
a relationship where much is already expected by the seller, creating
grateful experiences is a challenge and often takes “random acts” of
special rewards or exceptional service to get there.
Speaking to The New
York Times, Robert Palmatier, an associate professor
of marketing at the University of Washington and an author of the paper,
argues that customers made
to feel grateful most likely become enduringly loyal as a result. Moreover,
studies find people feel pleasure from reciprocating out of gratitude,
and guilt when they don’t. Gratitude, states the paper, can “increase
purchase intentions, sales growth and share of wallet.”
But Prof. Palmatier notes that most loyalty
programs (frequent flyer, hotel, store) don’t make customers feel grateful
because the rewards are “earned” for repeat business rather than “unexpected.”
He cited a few examples of gratitude-driving
situations. Zappos.com helps customers find shoes at other stores if it
doesn’t have a size in stock. The practice of handing out flowers by Hare
Krishna followers has proven to increase overall donations.
The Hyatt hotel chain recently launched a
dedicated program built around “random acts of generosity” to drive such
loyalty.
“We will be empowering hotel employees to
perform what we’re calling random acts of generosity,” wrote Hyatt
Hotels CEO Mark Hoplamazian on USA Today’s Hotel
Check-In blog. “So, don’t be surprised if
Gold Passport picks up your bar tab, comps your massage or treats your
family to breakfast. It’s part of bringing authentic hospitality to life
and making you feel more than welcome.”
Jeff Zidell, the vice president of Hyatt’s
Gold Passport program, stressed the “surprise” element in that both the
favors weren’t expected and there’s no discernable pattern on how they
are handed out.
The Times article
pointed out that just talking about the program undermines efforts at creating
the unexpected. Hyatt officials had debated whether to disclose it publicly,
and Mr. Zidell said that the only people who get a full explanation of
the new program are guests who actually benefit from it.
Still, the downside of any random rewards
program is that customers that find out about – but never receive – any
surprise rewards may angrily take their business elsewhere. Prof. Palmatier
summarized a customer’s response, “If there’s a program out there that
I know about and I’m not getting it, that’s not fair.”
Discussion Questions:
What are some ways retailers can create “grateful” experiences for
customers? Can you name any retailers that create grateful experiences?
How should such programs be set up to avoid disappointing loyal customers
who don’t receive any surprise rewards or attention?
I recently ate at a local restaurant for a family gathering. We were celebrating two graduations and a birthday, and I told the restaurant ahead of time in order to get a preferred view, not because I was fishing for any favors. Imagine the surprise of everyone at the table to have several sharable desserts served for free.
This is the sort of “surprise” gesture that builds loyalty, not just the food quality or frequent-diner program. And Hyatt is definitely on to something with its own program. The challenge is to apply this idea to a less service-based, intangible business like a large retail chain. How do more service-oriented department stores like Macy’s and Nordstrom incentivize their best customers if they aren’t prepared to offer hands-on attention in the first place? And how do stores that have built loyalty programs strictly on the basis of price incentives start to think outside the box?
It comes down to empowering employees, allowing them to provide random acts of kindness. Retailers themselves are nothing but sterile corporations without feelings. However consumers and employees do have feelings. Believe it or not, I find the airline employees do quite a bit. Often I have been comped little extras such as free meals, hotels, extra miles, first class upgrades, etc, when I neither deserved them nor were they required to give.
These random acts of kindness seem to be catching on with higher end retailers, in particular. Some high end dept stores have empowered their staff to spend a little money on gifts and surprises for their best customers. All in all, not a bad idea, especially if you’re on the receiving end.
The article has it right though when it cautions about making these programs public knowledge. Customers expect (rightly so) a level playing field. What’s good for one is good for all.
You know what most customers would be grateful for? Just some good, old fashioned customer service where the store staff are available, friendly, helpful and knowledgeable.
I have to question whether retailers need to create special grateful experiences in order to earn customer loyalty. Loyalty can be built by executing the basics of retailing in a way that meets or exceeds customer expectations.
In a grocery store that can mean many small things that make the shopping experience more pleasant: quick checkout, friendly and helpful employees, easy to find prices and an entertaining environment, to name a few. If these services are offered every day to all customers, the retailer will build a loyal following.
One aspect does not a program make. One emotion does not a relationship make. Ongoing, multi-faceted relationship-building programs are the answer.
We have long been proponents of ‘delighting’ shoppers and providing a one-of-a-kind experience that keeps ’em coming back. The Random Acts of Retail Kindness expressed in this article is exactly what will get buzz started and keep loyalty building.
Unfortunately, examples of these types of unexpected surprises are rare. One personal experience occurred when purchasing an automobile about two years ago. Not only were we met at the door by the manager of the operation but he also provided a dozen red roses in appreciation for our business, a gift card for a local coffee shop and a commemorative coffee table book on the Lexus tradition. The surprise was appreciated, remembered and continues to be talked about.
It would be my recommendation that the associates of the retail operation have freedom to be spontaneous and delight customers at will. Yes it’s risky for fear of abuse. However, the empowerment and in-the-moment flexibility will go far to making consumers feeling welcome, special and appreciated.
Can’t wait to experience Hyatt’s ‘reward’ for my Gold Passport patronage.
Yes, this can be done in retail. Installing a kiosk at the entrance for the customer to swipe or enter their loyalty number can send a text message to the store manager that, for instance, one of the store’s top customers is on the premises. The store manager could make a public announcement asking that person to come to the POS and receive a gift. This can easily be made into a positive, even though not all loyal customers may get something. Just knowing the possibility is there that I might get a gift is enough to choose this store over another.
Years ago, I was on a Delta Airlines flight, and prior to take off, a flight attendant walked up to me and handed me a free movie headset and drink coupon. She said, “Thanks for choosing us today. We know you typically fly another airline.” Everyone around me was stunned. I called Delta the next day to tell them how impressed I was, and they offered to match my status that I had on the other airline, and I started flying them primarily. Imagine what the perk cost Delta versus the $50k+ they got from me over the course of the next year.
Continue the service after the sale. I’ve botched this L.L.Bean quote here before–but it goes something to the effect of “Our customer service job is not done until the product is used up, thrown away and replaced.” In other words, we stand behind what we sell/do 100% for the reasonable expected life of the product/service/meal/flight–whatever. Customers will be delighted and will rave about you in public, the way I do about Cabela’s, and Country Home Products, and The Territory Ahead, and Costco, and….
I think Robert Palmatier has things a little backwards. It’s not up to clients to feel grateful. It’s up to businesses to make clients feel appreciated. How they choose to feel about that is their business.
This is done by going above and beyond the norm, as the article states.
Making clients feel appreciated is not a cookie cutter program that can be applied across the board. Doing this will only make some clients feel over compensated (cheapening the experience), while others may feel patronized.
For any program like this to work, companies must group clients by spending habits and “reward” them appropriately.
How to creating an effective appreciation program could fill a book. Hey, now there’s an idea!
I think in concept the practice of “random acts of generosity” is a great idea. That being said, talking to USA Today to create buzz about the program definitely creates expectations on the part of Hyatt’s Gold Passport customers. I can foresee some individuals being upset because they were not selected.
When I sign up for a program I expect to be offered all the same benefits as others who have achieved the same “status.” Yes, I realize that I have the same chance of being selected as the other members of the program, but I am sure to the person sitting next to me table that just had their tab picked up it doesn’t seem that way.
Here’s an example. I belong to several frequent flyer programs (don’t we all?). For client meetings, I have been flying from Chicago and to Denver frequently. Imagine my surprise when I checked on United’s web site to find that they were offering double mileage for these trips, but you had to specifically register to receive the double credit. Perhaps they sent me a notice and I missed it. However, I would have been far more grateful had they sent me a notice that said, you just received double credit for making this trip because we automatically registered you because you are an “elite” member of our program.
In speaking with a loyalty program provider, he mentioned a client who has a very large number of “clubs” as part of his program. Everyone who is a member of the program is automatically enrolled in these and any new ones created. Members may be aware of this but frankly with so many they forget. However, they are constantly being surprised by receiving a free cup of coffee, car wash, fountain drink, etc, etc. The value is that it is unexpected. The customers are grateful and his sales and profits show it.
Big Y, a grocery chain based in western Massachusetts, is renowned for its loyalty program, The Express Savings Club, and their unique approach to rewarding their best customers. One aspect of their system is the distribution of Express Rewards Coins–physical “gold” and “silver” coins–that can be redeemed by shoppers for rewards of their own choosing. The coins are not earned per se; rather, they are offered as a pleasant surprise on certain trips when loyal shoppers check out. Another example is the Big Y umbrellas they hand out to top customers on rainy days.
Brian Woolf, the loyalty marketing guru, has an entire chapter on Big Y in his excellent book, “Loyalty Marketing: The Second Act”, which is available as a free download from his website. I highly recommend the book to anyone interested in customer-specific marketing.
Zappos has created grateful customers by providing “suprise” overnight shipping upgrades. For a while, these were truly surprising and delightful. Unfortunately (for Zappos), this ended up creating a new baseline for competitors such as Piperlime (Gap) and Endless (Amazon); both of which offer overnight shipping. That’s why I would caution against surprises that become too systematic vs. those that are truly “random.”
This past week, I had a great experience in Home Depot. No. I really mean it. (ha!) In the paint department, the guy who waited on me went above and beyond; loading paint into my cart, making sure I had everything I needed to complete the job, offering tips and pointers all along the way. On to the garden center where a gentleman walked up to me and asked if he could get me a cold bottle of water. That one, small gesture positively shocked me. As he presented it to me, he asked about my project, commented on my selections and gave pointers. To me, it proved that the standard for retail service is so low right now that even the simplest gestures seem larger than life. What an opportunity!
Random Acts of Kindness, as publicized (ironically) by Hyatt, are not new but increasingly effective and the right thing to do. In the loyalty biz we call them “Surprise and Delights.” Sadly, the bar is incredibly low in terms of what marketers are doing with loyalty programs. Max’s comment above is right too: for many, flawless execution is in itself loyalty creating, partly because it is, unfortunately, the exception rather than the rule.
There are numerous ways to be seemingly random and smartly provide Surprise and Delights. The most effective is when they are data-driven, as in the example of Richard’s above. Of course he had to tell the restaurant they were celebrating an occasion (or three in that case!). Ideally a restaurant, or retailer would ask, or even better, know based on a customer profile that it was indeed around someone’s birthday. Databases make things like this possible but it really comes down to having a strategy like Hyatt’s and then using the data to execute it.
Probably the best and often simplest thing a company can do, assuming it is tracking customers, is recognizing trends. Customers know when the are shopping more often somewhere whereas the retailers typically do not, in spite of having the data. Putting in place up- and down-trender flags in customer records, and making those indicators visible to customer-facing employees makes this possible. Simply recognizing customers’ trends, such as “wow we are so glad you’re shopping with us” or “we have really missed you” is in itself a surprise and delight. In the end, this will tell customers that you know and care about them, which is the whole point here.
As for Hyatt, having just spent three days at one of their resorts, there were surprises though the service was absolutely top-notch.
Lots of great comments here already and I think they reflect the diversity of the types of benefits and “surprise and delight” initiatives (which is what I call them) people want or would respond to.
Several people have mentioned it already but getting the basics of service right is incredibly important–and enough to surprise and delight certain people. I’ll give an example. While making a unique cake recipe I needed to find Darjeeling tea. I called about five specialty food shops and coffee shops (both Starbucks and Caribou) and got a series of bored teenagers who had no idea what I was talking about and couldn’t wait to hang up the phone. Then I called Whole Foods–not the beverage department, just the store. The woman who answered the phone told me they didn’t carry any such teas but suggested I call XYZ tea shop in the mall (I had forgotten they existed) and was as friendly and nice and helpful as could be. I was surprised, delighted and impressed–and it certainly reinforced my feelings about the Whole Foods brands. They’re still too expensive for me to want to do all my grocery shopping there but I do more than I used to.
My point–loyalty is a complicated thing. Reciprocity is key in any relationship and that’s what the airline programs completely miss. Unique service and benefits matter but if your value proposition doesn’t add up they won’t save you. All retailers should remember that even with your best customers you’re always dating and never married so you can’t take them for granted.
One thing is to provide little extras for all customers: bottles of water on a hot day at the car wash, scent samples at a department store, gift with purchase, food samples, etc. With sampling in particular, the retailer gets a double benefit–the shopper feels they got something extra, and sales of the item go up.
For best customers, it seems to me that an elevated level of service is what they are really looking for. A hotline to call with a problem, for example, where they don’t get an automated response. I’m not wild about doling out random freebies even to best customers because it sets up an expectation that can’t be met much of the time.
If you delight customers–and random acts of kindness is one approach–then they will come back and maybe even talk about it. (The power and positive business effect of advocacy is well understood.)
The challenge for products/services/retailers/brands/etc is to invest in finding ways to actually deliver them, and not focus solely on marketing the brand promise.
Yes, retailer random acts of kindness make for a very happy shopping experience.
Recently I had a situation at my local SuperFresh, where three particular items I crave for were not available, their fantastic coconut cream pie, a particular extra virgin olive oil, and imported Romano grated cheese.
I mentioned this to store personal, and received a friendly note saying that I could pick them up the next day at the customer service counter. Sure enough, they were there as promised.
That made me feel like the store really wanted my business.
I call that gold-ribbon service.
I liked the thought that was discussed that talking about the program somewhat defeats its purpose. In general, I see the employees of these companies being empowered to provide assistance or special favors to customers where they may be most needed, deserving, or build upon the brand experience. That is a great idea!
I agree with Al. When I read about about what Hyatt was doing I immediately thought about the disappointment of something not happening. By announcing the program, didn’t it just change it from the unexpected to the expected?
Meeting one’s needs does not create a memorable experience or really develop customer loyalty. Great customer loyalty comes from exceeding needs; doing things that are unexpected and undeserved. The unexpected and the undeserved are the real points of difference.
In the very first example given in reply to this message; yes, the deserts were undeserved possibly but in some ways, they were not unexpected. How would you feel if after a meal, the waiter said “I have enjoyed waiting on you so much that I would like to buy you desert.” It happened to me. Look at the outcome. Waiter got bigger tip, I have gone back more then I would have normally, have asked for the waiter again, more tips. (I made sure he had permission to give away the desert.) The waiter felt empowered.
I’m a big fan of the Walmart greeter. Greeters reaffirm the retailer’s commitment to the customer. In the absence of a more tangible reward, having someone smile and say hello sets a constructive tone. Little things matter!
With few exceptions, such as Nordstrom, the business models of the national chains emphasize volume, scale and technology over personal interaction at store level. At best, they seem to strive for as convenient and seamless a transaction and experience as possible. Anything more seems to be beyond their reach. They are simply not structured to provide store-level employees the discretion implied in “unexpected random acts of kindness,” as if that would build loyalty.
Loyalty is not built by having to “earn” anything, or receiving anything “unexpected,” or even “random acts of retail kindness.” The term “Loyalty Program” is an oxymoron. Loyalty can’t be programmed; that’s not the nature of loyalty.
Building loyalty starts with a genuine personal concern for customers, it’s earned one day at a time, one customer at a time, in personally meaningful one-on-one interactions that cumulatively build into an enduring relationship. There’s nothing “unexpected” about it, it’s as intrinsic to the company as turning on the lights and unlocking the doors. This is where vibrant, passionate and engaging independent retailers have an incredible advantage over their much larger counterparts.
Unfortunately, the original purpose of the Walmart greeter has been lost since their primary job today is to help deter theft. For most mass merchants “Random Acts of Kindness” are far too rare for any real impact. For upscale and specialty retailers this requires hiring people who really care about helping customers: teaching them about the importance of delighting every customer; empowering them to go above and beyond what is expected; and creating an environment where developing long-term customer relationships is the driving goal of every customer interaction.
David is spot-on: It all comes down to employee empowerment. An authentic, memorable experience is most often the result of an employee having the confidence that random acts of kindness, words or gestures extended to a customer, are supported and encouraged at the highest levels within their organization.
The key is that such gestures come from the heart, or are spontaneous, rather than following a pre-defined formula or framework.
Others here have accurately noted the customer service quality bar is unfortunately so low these days, it doesn’t take much to surprise and delight.
Debbi Fields has always been a strong believer in random acts of kindness, and I’ve collaborated with her on a few. We’ve handed out freshly-baked cookies to very appreciative (and grateful) commuters exiting the El on a May morning in downtown Chicago. The woman is a ball of fire who actually runs up escalators in heels (it was all I could do to keep up with her). This particular RAOK was covered by local TV stations, and the Mrs. Fields stores in the area (along with my sales of frozen cookie dough in supermarkets) enjoyed a nice sales bump. We understand that other vendors (orange juice, bagels, etc.) followed our lead in Chicago and performed their own successful RAOK.
We learned what others have commented on, that random retail acts of kindness build bidness and must be a surprise. But, it cannot become the linchpin of a customer service program. First a solid customer service program, and then RAOK. First the cake, and then the frosting. Or, in Debbi’s case, first the cookie and then the chocolate chips.
I agree with Ted Hurlbut’s comments. Loyalty starts and ends with great service, period. Just offer the best god-darn service possible and people will be loyal! I don’t think offering standard meaningless rewards builds real loyalty, it just provides additional discounts. Call it random acts of kindness or just great service, if this is done…ALL THE TIME, then people will like your store and be more loyal.
I think there is a big difference between loyalty and engagement. You can have all the aspects of great loyalty, but if you do not have truly engaged brand (employees, shareholders, customers, etc) participants. We, at Loyalty 360 (The Loyalty Marketing Association) believe that you cannot have truly loyal and passionate fans without engagement.
Random “Small” (as Linda Kaplan Thaler writes about) “Nice” acts create a powerful engagement attribute for your brand. She describes many little; nice touches those individuals who have brand participants can do to create such engagement. It is so true, especially, in this day and age. A door keeper saying hello, or offering free to-go pizza to my four year olds every time we go to Carrabba’s, creates loyalty from my four year olds, but engagement (and true loyalty) from me and my wife.
I blogged about this article at my website earlier this week. While I believe that Hyatt has the correct overall objective, which is to delight customers to increase retention and loyalty, I am concerned that they may be approaching the issue from the wrong direction. Unexpected gifts do not drive loyalty–customer experience does.
You cannot buy customer loyalty with gifts, whether those gifts are expected or not. Gifting leads to a “what have you done for me lately” mentality, which actually diminishes perceived value.
What receives loyalty is solving problems. Make my life easier, simpler and quicker and you will have my gratitude for life. Don’t give me a pen; get me through checkout quicker. Don’t surprise me with a drink; let me see new products before other people.
Recognition and access are the keys to loyalty–know who I am, so I do not have to remind you over and over, and let me on the inside, so I feel like part of your company. Then I will reciprocate, and bring you into my family. As long as you remember, I won’t forget.
Random Acts of Retail Kindness is not about tangible gifts. RAOK are simply those things that make a customer feel that they are not just one of a herd of faceless, meaningless drones that will move past the checkout.
Do you tip the bartender that calls you by name and has your usual ready more? How about the hairdresser that asks about your kids by name? The receptionist at the doctor’s office that asks you about your parents? The auto mechanic that hands the child with you a pen and paper so that a picture can be drawn to put behind the counter?
My daughter decided to wander off when with me at Disney World. The moment I told a castmember, 50 employees dropped what they were doing and sprung out of the surrounding area to look for her while very quietly closing off the area. My little explorer was found in no time and the employees faded away before I could even thank them.
All of this simply tells the customer that they are unique, special and valued. That they deserve special recognition and are important to use as a person and as a customer.
Notice that none of the above cost a dime…it just takes the proper atmosphere and expectation that each customer is not a credit card but a person.
What is that old line about, “If you want people to be loyal to you, be loyal to them first?”