Reward and Punishment

  • by May 9, 2002
One of my favorite marketing anecdotes is about a company that solicited the services of one of the industry’s foremost customer service gurus. Said guru immediately instructed his guests to escort him to the establishment that – in their opinion – offered the best service to their patrons.

He was taken to a well-known grocery/retail superstore to investigate this superior treatment first hand. He walked the aisles; noted the customer service representatives on call; glanced at the restaurants, ATMs and restrooms available and eventually concluded his tour de force.

His response to this feast of customer exhilaration was eagerly probed, but no one could have anticipated his unique perspective to what he had witnessed.

“Tell me why it is that this store, which you believe offers the best service, rewards its most transient and least valuable customers, but punishes its most loyal and highest spending ones,” he asked.

Looks of utter puzzlement and disbelief stared back at the consultant.



He elaborated: “Why do you offer quicker check-outs to those with 10 items or less or cash-only, but to those customers with 2 or more carts filled to the brim with groceries, you make them wait in endless lines?” His suggestion was profound: “Why don’t you link two check-out registers, and have two cashiers and two packers checking out the same customer?”

Think about it. It’s so simple. And yet, how often have you seen anything remotely similar?

Here’s another example. I simply love to hate the airlines. Their advertising campaigns make me feel positively airsick. All the mushy feel-good propaganda about being the people’s airline, and one airline, one family becomes antagonistic when juxtaposed with the endless delays, customer apathy and “constant punishments” handed out to returning customers.

Irrespective of how much you paid for your ticket, or what class you reserved, there’s still the basic proposition of escorting a human being from point A to B. You’d think therefore, that it makes perfect sense for airlines to treat their customers like human beings, but you’d be wrong.

Don’t you just love the curtain that gets shut dividing business from coach, usually followed by a patronizing sneer? Or perhaps the $5 fee for headphones on a cross-country route. It doesn’t take a rocket-scientist to recognize that the cost of the movie being shown is irrespective of how many people elect to pay for headphones. Kudos to American Airlines for creating more legroom for their sardines, but is this too little, too late?

Luckily for us travelers, 3 airlines have successfully shown up their goliath counterparts and blazed a new way forward: Southwest, Virgin and Jet Blue.

Southwest offers nothing other than low fares and on-time arrivals. This way they almost never under-deliver.

Virgin was the first to install television monitors into every seat, democratizing on board entertainment. Also, they treated their Upper Class passengers to rewards you would not normally associate with air travel, such as personal massages.

Jet Blue is everyone’s darling right now. And rightly so. A hybrid of the Southwest and Virgin models, with the irreverence and attitude to match. It’s not surprising they’re growing at their current exponential rate.

What are the lessons we can learn from the reward and punishment philosophy and how can we apply these lessons to the world of media and marketing?

On one level, we can interpret targeting using the rationale of rewarding relevance through accurate targeting, without simultaneously insulting the target by wasting their time with meaningless or irrelevant communications.

On another level, there are intriguing implications for relationship marketing embedded into the concept of treating different tiers of customers differently – without dissing one group at the expense of another.

A badly segmented or non-segmented in-house list does just that. By sending out a one-discount-fits-all offer to the entire consumer base, think of the punishment being issued to the most frequent purchasers.

Technology has given us the wings to fly when it comes to establishing a dialogue, forming a relationship and building loyalty over time. At the same time, it also presents significant challenges if poorly executed or implemented. This being said, the story of Icarus springs to mind. Part technology. Part poor judgment.

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