Loyalty customering rather than marketing

When you ask Joe Pine, co-author of the books The Experience Economy, Infinite Possibilities, Authenticity and others about loyalty marketing, he'll start by dismantling the whole idea of the market. Here's some excerpts from an interview he gave Colloquy before his presentation at their Loyalty Summit that starts today.

"Understand that markets do not in fact exist. They are a fiction arising from the agglomeration of anonymous customers, and only individual customers truly exist. Therefore, think of yourself as practicing loyalty customering, not marketing."

To Pine, customering means focusing on inherently personal and memorable experiences (here he is basically addressing retail and services):

"The shift from advertising to experiences as the primary demand-generation mechanism! Advertising today is so hit-and-miss - plus it's a phoniness-generating machine. Companies need to move their marketing dollars over to experiences that engage current and potential customers, getting them to spend their time and their money with company offerings."

Here's what Pine explained he learned from the years when he worked at IBM:

"That every customer is unique! I ran a group that brought customers into the development process of the AS/400 computer system, and every single one wanted it to do different things, with different applications and data, connected to different equipment, and on and on the list went. They were unremittingly unique - and so is every consumer today. We need to understand and embrace that uniqueness, mass customize to individual customers and cultivate a learning relationship with each of them."

Here's the advice he gave when asked what would be the key features if he launched a rewards program:

"I wouldn't know I was in a rewards program at all! Rather, the program would just learn my needs, wants and preferences and mass customize the company's offerings to me. Customization has value, so I would naturally come back to the company again, which provides it with another opportunity to learn, which enables it to better mass customize to me, and then the additional value causes me to come back again - and so and so on. If the program did want to reward me with something free, it would do so by surprising me, not by some rote mechanical means, which in fact commoditizes the company's offerings by getting customers to focus on price and discounting rather than on value."

Here's Pine advise on three key ways loyalty marketers can use social media to enhance the customer experience:

"First, simply be with consumers - provide engaging stories, connections and ideas - in a place where they spend a large swath of time. (Remember what Willie Sutton said about why he robbed banks - that's where the money is!) Second, get them to experience your offerings, even if only virtually, before they buy them (so the chances they will buy them go up). And third, make it easy for them to share those experiences with others and not least with you (providing an opportunity to listen and learn - key requirements of a dialogue)."

And finally, here's his preview of what he will discuss in his presentation at the Colloquy Loyalty Summit:

"But the key idea underpinning all this is that goods and services are no longer enough; what consumers want today are experiences - memorable events that engage each individual in an inherently personal way. It's therefore not enough to make things nice, easy and convenient - what most people mean when they use the term "customer experience." You have to make it engaging, memorable and even dramatic."

There's no doubt that according to Pine, location-based entertainment has as distinct advantage in today's economy as more and more customers are seeking experiences rather than just goods and services. However, as more and more retailers and service providers shift to offering consumers experiences (think of an Apple Store that gets more customers than a department store), location-based entertainment venues will need to raise the bar to stay competitive for a share of the consumers leisure time, which is a zero sum game, even more so than their dollars.