Public Relations & Social Marketing Insight
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Social marketing, PR insight & thought leadership - from The PR Coach
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Loyalty Cures for the Business Black Eye: 3 Tips for Regaining Customer Trust, From Leading Crisis Experts

Loyalty Cures for the Business Black Eye: 3 Tips for Regaining Customer Trust, From Leading Crisis Experts | Public Relations & Social Marketing Insight | Scoop.it

Loyalty is not a common resolution to crisis situations, but it should be and likely will become, as organizations realize the immediate value of the customer information loyalty programs provide. In a crisis, such insights could make the difference between quarterly losses or gains.

 

“The only way they can restore their customers’ loyalty is having that data and maintaining that data and then responding to the consumer in any way possible to make amends,” said Britt Beemer, founder of America’s Research Group, a customer behavior firm that has performed research for at least 30 companies in crisis. “There are a lot of things you can do to win.”

 

Many companies rely on their PR teams to lift them from a public black eye, but fewer take full advantage of the resources that exist in their loyalty marketing teams. Indeed, rewards programs can often times be sub-optimized to enhance overall business results, be it in a crisis or day-to-day operations.

 

We spoke with several experts in crisis communications about how to use loyalty to regroup and recover from a potential public relations crisis. Following is their advice....

Jeff Domansky's insight:

Several crisis communications experts share their advice on how to use a loyalty program to regroup and recover from a crisis. I wouldn't reach for my loyalty program first in a crisis but I'm open minded on using data to help. It seems insensitive to me to say "Sorry our food made you sick. Here's a free beef burrito!"

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US: To counter mass customer exodus, Chipotle turns to loyalty | The Wise Marketer

US: To counter mass customer exodus, Chipotle turns to loyalty | The Wise Marketer | Public Relations & Social Marketing Insight | Scoop.it

What's a little e coli among friends? That's the question US fast-casual dining chain Chipotle will soon be asking its best customers. After publicly eschewing the idea of launching a customer loyalty programme last year, Chipotle executives said on an earnings call last week that they aim to stem the flood of frequent diners abandoning the chain with - wait for it - a loyalty programme. Though the programme is likely to be temporary, Chipotle hopes it will reignite customer passion for bowls and burritos. The problem: Chipotle executives still seem to display a fundamental misunderstanding of the purpose of loyalty programmes.

The announcement was one of the only positives in an earnings call that can only be described as apocalyptic: same store sales fell nearly 30% in the first quarter of 2016 and the company posted a net loss of $26.4 million. The company has tried everything to pull out of the free fall: giving away millions of free burritos, BOGO offers, national advertising campaigns; nothing has worked. Money quote from reporter Virginia Chamlee over at eater.com:

"The aim is to target the most loyal Chipotle consumer — i.e. the one who visits 25 or more times per year. The company saw the largest declines among its top loyal (25+ visits a year) and its 'light' consumers (those that visit two to five times per year). Noting the decline in visits amongst its once most-loyal customers, [Chief Marketing and Development Officer Mark] Crumpacker said the company would love to get that 'habit' back up. "We do believe it's beneficial to us to get people back in the habit of visiting Chipotle [as often as they used to]."...

Jeff Domansky's insight:

Will a new loyalty program bring customers back to Chipotle after the E. coli crisis?

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