The 17¢ Loyalty Program
We’re hungry for personal connection — and that’s how brick-and-mortar stores can compete and thrive in an e-commerce world.
I open the box, anticipating that in 30 minutes, I’ll be strumming new strings on my acoustic guitar. It is a minor purchase, my grand total is $5.35 for a set of strings, so I’m surprised to discover the level of effort put into this package. Inside is a welcome letter, a promotion for #NewGearDay, a sticker, my new strings, and three pieces of candy. To borrow a well-worn phrase, I am surprised and delighted. The company that I had purchased from, Sweetwater, had created a memorable unboxing moment.
In the early days of my UX career, a common piece of advice was intentionally do that one thing in our design to make it memorable, to sweeten the experience. The phrase “mint on the pillow,” referred to boutique hotels that leave a mint or chocolate on your pillow each time they turned down your bed for the night. On cruises, bed turn-down often includes the steward shaping bath towels into various animals, a moment of delight for passengers returning to their rooms for the night. Chicago landmark Lou Mitchell’s typically has long waits for weekend brunch. The host eases that pain point by passing out donut holes and tootsie rolls.
None of these examples are the primary reason people are there. Hotels are a place to rest your weary bones when traveling; cruises are for traveling to many places in a single trip; Lou Mitchell’s is known for breakfasts that challenge the waistline.
Loyalty and the small business storefront
E-commerce typically aims to be the most convenient and efficient transaction between a retailer and a customer. But does it have to aim so low? Does the e-commerce experience need to be a race to the bottom, based only on price and delivery time? That’s a race that can only be won by companies with massive scale, leaving small and medium businesses struggling to maintain healthy margins.
A local gift shop owner in the Minneapolis suburb where I live (whose lifeblood is the sidewalk shopper) had to adapt to the current pandemic and the “new normal” quickly. The shop owner diligently photographed items every day and evening and uploaded them to her fledgling website. Combined with curbside pickup, she managed to give her loyal customer base a way to support her during the quarantine lockdown.
Kevin Kelly, founder of Wired magazine and the most interesting man in the world, famously wrote that any creator or business can be successful if they have 1000 True Fans. Of course, that number needs to scale to support more than a single creator but the math is geometric rather than exponential. His point is: succeeding as a small business requires loyalty from a relatively small number of customers.
The suburban gift shop owner can survive not only because she adapted to our current normal, but because she already has loyal fans finding ways to support her.
Creating customer loyalty with 17¢
Let me back up for a second. The customer life-cycle generally follows some version of the sales funnel. Awareness leads to consideration, which leads to a purchase. Once a person has made that first purchase, investing just a fraction of a marketing or customer experience budget leads to retention and ideally to loyalty and advocacy.
Most companies spend their time and money at the top of the funnel as the cost of acquisition is 5–7x more than the cost of retention. Why? Creating loyalty takes creativity, yes, but more importantly, it takes emotion; something many companies feel is too much effort or costs too much. It doesn’t need to be expensive.
So — what if creating loyalty only cost 17¢? I looked up bulk candy prices. A single Tootsie Roll is less than 3¢. The Atomic Fireball and Bit-O-Honey are each a little more than 7¢. Seventeen cents.
What if creating loyalty only cost 17¢?
”Great experiences hinge on peak moments”
In “The Power of Moments” by Chip and Dan Heath, the brothers delve into detail on the power of the Peak End Rule. Psychological studies demonstrate that people rate experiences based on two key moments: the “peak” and the end. The peak can be either the highest or the lowest moment in the overall experience.
The opportunity for businesses is hiding in plain sight within this rule — people will forget or forgive minor inconveniences or dips in the end-to-end experience, but they will remember the peak. If a business can elevate specific parts of a journey, that might be enough to create the loyalty that businesses crave.
The Sweetwater purchase journey creates a number of those peaks that compete for the top spot. Following my shipment arriving, complete with 17¢ worth of candy, I also got an email, a phone call, and a text from my “personal” customer representative.
I reached out to Justin Dunbar, Sweetwater’s Director of Customer Service, and he emphasizes that “doing the right thing” is a guiding principle for the company. In an email, he elaborates,
“I think our biggest mission is to create raving fans by doing something incredibly unique by building long term relationships. If you feel comfortable, almost like you’re buying from a friend, then you’re much more likely to shop with us again and tell all your friends and family.”
That extra effort makes my $5.35 guitar strings feel like a million bucks. That extra effort made me the “raving fan” — with plans to already buy again and to make more significant purchases.
Those peak moments created more than loyalty. They created advocacy, the pot at the end of the rainbow in customer retention.
Designing for moments
This is great news for companies of any size. The next time you’re creating customer journeys, focusing on the pain points and the potholes, carve out some time to craft peak moments. Online or offline, a concerted effort with a focus on designing one or two peak moments doesn’t have to cost millions. Seventeen cents might be all it takes.
Tim Letscher is a leader in Slalom’s Experience Design practice specializing in design thinking and service design. He loves finding simple and elegant solutions to complex business challenges, rooted in human-centered design. Reach him at tim.letscher@slalom.com
The views above represent Tim’s opinions.
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