Steve Yastrow, over on the Tom Peters site, asks if a bribe can lead to loyalty and whether 'loyalty programs' can deliver loyalty.

Well, Duh, as you Yanks like to say (I prefer 'D'ohhh' a la Homer Simpson, but not quite the same meaning, is it). Anyone who's been paying attention for the past few years - and apparently that's not a lot of people - could have told you these basic marketing rules:

1. Sales promotions are designed to create a short-term sales spike or smooth out seasonal dips in sales. They are a tactical tool.

2. In response to the perceived need for 'customer loyalty', sales promotions suddenly got dressed up in new clothes. Give the program a card for customers to put in their wallet, stretch the timescale out so it lasts, say, all year round. Call it a loyalty program and what have you got? Well, to borrow from a political debate in the US at the moment, you've got a pig with lipstick on.

I wrote an article for Marketing Week a couple of years ago pointing out that most of the loyalty promotion, card-based programs and schemes are just sales promotional tools in disguise and can't/won't ever deliver customer loyalty.

So, to state the obvious, we're still here, then. But, it did generate a wave of human energy, didn't it, all the media coverage about what might happen when the particle accelerator at CERN was turned on this morning (Swiss time). Did you notice how much more 'alive' and animated people were/are when talking about it? There was a thrill attached to the minutely possible (or, as most scientists were saying, vanishingly possible or, in fact IMpossible) chance that the mundane would suddenly .

(That's a writer's conceit - using the . as a sudden 'stop' for impact. First used in the book 1066 And All That, which ends with the words "...and history came to a complete . ") Apparently the first high speed clashes between particles won't happen till October 25th or something, so we'll go through it all again then.

But, what interests me from a customer-centered leadership perspective here is...What can you, as a leader, do to generate that frisson of energy about your organization; that sense of 'buzz', sense of aliveness that communicates itself to customers? Leaders generate and channel energy in people; that's your main job description.

Steve Jetley, a customer of Lloyds TSB bank, was unhappy with the service he received. So, he set his online banking password as "Lloyds is pants" ('pants' is UK slang for 'useless').

A mischievous employee altered it to "no we are not".

So, Jetley tried an alternative - "Barclays is better". The bank refused it.

Jetley then tried "censorship". The bank refused to allow that, too, saying it was too many letters.

The rebel customer compromised with a six letter word which implied the bank was cr*p.

Lloyds then said there are new rules that say numbers have to be used, so the word was unacceptable.

Don't you think that someone - either the customer or the bank - should have said "Thank you and goodbye: you/I am no longer a customer" before the farce unravelled to this stage?

It wouldn't have been as amusing, though, I suppose.

The serious learning points:

I read a great article in Tyler Brule's column in the Financial Times over the weekend.

Apparently making people wait for a meeting to show how important you are has gotten out of control in the US. And it shows a culture that simply doesn't care about the time of people who have come to see you, whether they be a general business appointment or a customer who is left clicking their heels in reception. Here's a brief extract:

"On a recent trip to New York, a colleague and I were on the brink of getting in the lift without a word and leaving: our host had showed no interest in keeping her appointment and the receptionist was more interested in running a nail bar behind her big desk than playing the role of mistress of first impressions.

"But at the moment we were about to leave, an attentive gentleman rescued his colleague and his company's reputation with a tactful show of diplomacy and charm. It shouldn't have been necessary.

"As the ailing economy chokes business and consumers, only those companies that take a cold hard look at how they are treating the people that keep their coffers full - and act accordingly (by improving service) - are the ones that deserve to survive."

Interesting slideshare here. Skip to slides 89-95 (-ish) for examples of how Southwest Airlines and Zappos use Twitter for customer service. Micromedia, small interactions building to have big effects - it's important to be aware what you can do with this stuff in customer service

Using Twitter for Marketing, Branding and Customer ServiceView SlideShare presentation or Upload your own. (tags: association web)

"Good timbers do not grow with ease;
the stronger the winds, the stronger
the trees..."

- Williard Marriott

The one good thing about a downturn is that it makes you stronger as an organization. Or, at least it should. Most organizations just cut mindlessly, in which case it doesn't.

Use this time to spot which of your frontline people are most resilient. It is likely that morale and motivation will flag among most, as that is natural in a downturn - people are worried about their own prospects, their spending power outside of work and so on. What you want to try and avoid, of course, is that mood being reflected in your relationships with your customers.

Role model the most resilient frontline employees - those who can continue to smile and provide good service and think proactively of the customer's needs, rather than be distracted by their own concerns - and use their profiles when recruiting. Also, hold them up as 'heroes' to the rest of the organization.

Keeping Customers In Tough Trading Conditions
Here’s some ammunition to convince the boss or the finance director (or you, if you are the top boss or finance director) that customer-facing resources deliver profit and need to be sustained, not cut back, in tough trading conditions.

1. Cutting service problems increases profit
"1% cut in customer service problems could generate an extra £16m in profits for a medium size company over five years."

Source: Henley Centre

2. Keep the ones you've got
"It can cost six times more to buy new customers than retain existing ones."

Source: US Office of Consumer Affairs

3. Service leaders are more resilient in a downturn
"Service leaders…

Charge on average 9 to 10 percent more for their basic products and services

Grow twice as fast as their low-service competition

Improve market share an average of 7 percent per year. (Low flyers lose market share by as much as 2 percent annually.)

Have an average return on sales of 12 percent compared to 1 percent for low flyers."

Source: Strategic Planning Institute, USA. (Research into 'low cost' vs 'high service' as two extreme customer propositions on which to base your business)

...low expectations.

When you have no choice your expectations are lower and 'pretty good' can be pleasantly surprising. (Also, when you are disappointed, the world/supplier is responsible, not you. So you can at least externalize your dissatisfaction).

When you have 100s of choices, your expectations are raised. Get the choice right and you will be as happy as possible. There is an optimum choice. And it's up to you to make it. Now. If you are still not happy with the choices you make, you blame yourself.

The more options we have, the more we regret what we didn't choose. This opportunity cost becomes a lingering regret that subtracts from the satisfaction of the choice.

That’s a distillation of the core of Barry Schwartz's excellent book The Paradox of Choice: Why More Is Less, which Schwartz says he wrote after counting 175 different salad dressings and 75 iced teas on his local supermarket shelves and thinking, “This is crazy”.

As a secondary point, that's why customer satisfaction ratings can stubbornly refuse to go up despite service improvement initiatives: as things get better all over, customer expectations rise, and they/we are more easily disappointed and less easily satisfied. "Customer expectation inflation" Jim Sterne once told me he calls it.

When your trading conditions turn down, the knee-jerk reaction is to start to re-centralize again. In a bid to control costs, power is pulled back from the front line, and decisions moved up.

Big mistake. Front line people. as relatively low earners compared with the rest of your employees, are themselves already disproportionately affected by rising food and fuel prices. Retrenching and making them feel 'done to' at work rather than do-ers and decision makers only reinforces a sense of insecurity and poor morale. What's the most powerful force in the Universe? The need to feel in control of our lives.

I was invited to breakfast a few weeks ago at the home of Charles Handy, the business guru and author. So I didn’t look too ill-informed or stupid, I read his latest book 'Myself and Other More Important Matters' before going for breakfast.

I've become addicted to Slideshare. I like this (the Slideshare, below), though I think the title doesn't do it justice ('Customer Service is the new Marketing').

I particularly like 'The Secrets of The Concierge', which you can find on Slide 21. They are:

1. Put conversations at the centre/center of your business
2. Reduce your sphere of control to increase sphere of influence
3. Smash the silos

3. is now a cliche (though true). And the Cluetrain Manifesto taught us 1. ten years ago. I find 2. the most potent message at the moment. Anyway, here's the slideshare (click on 'view'):

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