The Gift of Loyalty
By John Hennessy
Delta Airlines, through their SkyWish program, lets SkyMiles members donate flight miles to 16 designated SkyWish charities. Delta will cap off this year by donating 5 million miles.
The SkyWish program was launched by Delta in 1995 and has donated more than 1 billion miles over the past 10 years. The program also launches additional mileage donation campaigns in response to hurricanes, tsunami’s, floods and other natural catastrophes throughout the world.
According to Jeff Robertson, managing director of the SkyMiles program, “Some of the miles that Delta and its SkyMiles members donated have flown relief workers to disaster-stricken regions and flown victims to safety. These miles have helped organizations with research and fundraising, sent athletes to the Special Olympics and sent patients to receive medical treatment at the world’s best hospitals.”
SkyWish mileage donations may be made via e-mail at delta.bids@delta.com, by calling 1-800-325-3999 or via FAX
at 404-773-1945. There is a 5,000-mile minimum donation, and Delta will boost all donations by 20 percent until Jan. 31, 2006. Additional SkyWish donation information can be found
at delta.com/skywish.
Moderator’s Comment: What are other, indirect ways – outside the scope of a loyalty program – can organizations create an atmosphere that fosters
loyalty?
According to the U.S. Department of Education, American public schools need to find 2.4 million new teachers by 2012 to replace the 42 percent of all K-12
teachers who are currently over 50 and soon will be retiring.
CIO magazine publisher Gary Beach writes that this group includes up to 80 percent of the current teaching corps who are teaching science and math “out
of field” (that is, without math or science degrees). Gary has become aware of a program and company attempting to solve this dilemma.
IBM has a Transition to Teaching Program. This program helps any IBM employee interested in teaching gain the appropriate credentials. According to IBM,
“so that employees with bachelor’s degrees or credentials in math, science and related fields can more easily complete the preparation to become K-12 teachers.”
Through this program IBM helps satisfy the need for new teachers in general and particularly those skilled in math and the sciences. It also helps retiring
IBM employees, who still have a lot left to give, gain teaching certification and continue to contribute.
This isn’t done as part of a loyalty program. However, IBM’s Transition to Teaching program will certainly place folks with IBM pedigrees and experiences
in front of young minds who will eventually be making career decisions. Stories about this program will resonate favorably with certain IBM customers and prospects and how they
perceive IBM. –
John Hennessy – Moderator
Confession: on the little poll, I voted “somewhat effective” because that’s what I wish, but as soon as I voted I knew that it wasn’t what I really believed. I don’t think it makes much difference in loyalty, at least for Delta. They’re getting some of those miles (a liability) off their books, and they’re doing great things. But when it comes to choosing my next flight, I’ll shop price and schedule. Airlines have chosen to be in the commodity business, for the most part, with very little differentiation. It’s one reason they’re all in such trouble. I wonder how the Delta pilots feel about this, since they now face the prospect of voting on a 14% pay cut for themselves. All this hurts to say, since I am a big believer in the causes Delta is supporting, and I applaud charity work. I just don’t think it makes much difference in terms of shopper loyalty.
I agree with Warren that most purchases have nothing to do with charitable impulses or charity-related pr. The most effective use of charity-related marketing is done by the affinity-based credit cards, since credit cards are commodities, anyway. Target, for example, has a great charity program supporting schools, but I doubt that people drive an extra 3 minutes out of their way to shop at Target for that reason.
I agree with the general view: this seems to fall squarely in the PR arena. I believe the best PR is that which is congruent with an organization’s overall policies and behavior, not in contrast to it — so if an organization normally actually does serve all its constituents (customers, staff, community, vendors, and as if we need reminding, stockholders), PR of the type Delta is pursuing can be very effective (assuming the actions being publicized in themselves serve constituents, as is the case here). If the organization does not actually serve all its constituents, then this type of PR is at odds with the organization’s behavior, and actions do seem to speak louder than words. Loyalty is related in that it is based on actually serving customers; if customers are not served well, then no there isn’t enough PR in the world to overcome that.
The reputation of an organization, especially those that are in commodity businesses, can play a large role in the loyalty and repeat purchase of a company’s products and services. I’m not disagreeing that “corporate citizenship” has little to do with customer choice in the airline industry where price and schedule are the main drivers of which carrier someone uses. However, companies that are seen as leaders in their industry, producing high quality products and services, caring about their employees and their customers, being financially sound, and giving back to the communities in which they live and serve has been proven to increase the loyalty a customer feels towards a company. And loyal customers are more likely to continue to buy products, buy more of a company’s product line, and recommend the company as a great place to do business with.
When choosing between two equal offers, customers will weigh the corporate reputation of the organization in their decision. If reputation wasn’t important, companies wouldn’t live and die by their inclusion or exclusion in the Fortune Most Admired Company list.
Sometimes this natural born cynic (I was all of 14 the first time someone described me that way) can be a sappy, softie of an idealist. In the UK we have an organisation called Business in the Community, we have Education Business Partnerships and we have all sorts of activities for which businesses contribute their employees’ time to work with schools and students and the community. Much of this is well publicised, at least on a local level, and I believe it makes a difference to the way the companies are perceived by their employees and the parents and teachers with whom they have contact. Many of the programmes are devised using the most lateral thinking imaginable and they have extremely long term benefits. I’ve devoted hundreds of hours to participating and promoting them and cannot bring myself to believe that they are not doing some good for one and all.
I have been a Sears customer (and credit card holder) since 1964. Most of the appliances and much of the furniture in my first house in 1969 came from Sears. In the last decade, I have had more and more problems with Sears – mostly with the attitude of sales associates and store managers. My wife and I had just about decided that we could live without Sears until they got involved with Extreme Makeover Home Edition and until we learned how they are taking care of the families of employees called to duty in Iraq and Afghanistan.
If it were not for those things, Sears would not be on the list of stores we shop. So I think that “loyalty” can be effective.