Are you a member?

3.6.2019

Imagine a time when there were no loyalty programs. Imagine also that you were the person who invented the first loyalty program. That is to say, you persuade customers to register by disclosing their names and contact information, and then you build something that captures their purchasing activities over time. As a reward for allowing you to do this, you give the customers points, for example 1 point for each 10 euro of purchases. And then you offer the customers something in return for their points so that the net outcome is that their costs are reduced. This type of program, you think, may foster loyalty, but it will also create a database that can be used for market communications purposes and perhaps also for analyzing customer behavior. Who knows, you may even be able to sell information in the database to various vendors.

 

Anyway, in the process of inventing this program, you need to make a decision regarding what to call the customers who decide to participate. Essentially, the program will reduce their costs, so it may be cherished by people with little money or those who are stingy. Not everyone of with such characteristic, however, would like to be explicitly classified as such. Therefore, you may want to avoid labels that draw attention to being poor or concerned with money. Similarly, you may wish to avoid labels signaling that those who join the program give up parts of their privacy and that they may receive heavy doses of unwelcome commercial messages. So, what label should you use for those who choose to participate in your program?

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You should think carefully about this, because the mere label used for something can influence an attitude towards it. Marketers definitely know this. This is why, for example, some retailers have changed the label “mustard cabbage” to “ruccola”, and some are now referring to “blood orange” as “red orange”. Other examples are as “adult entertainment” (which may be less provocative than “porn”) and “calamari” (which may sound more tasteful than “squid tentacles”). This practice has indeed a long history. When the automobile was introduced, there was soon a need for places where it could be filled with gasoline, but already at that time, the public knew that gasoline can easily explode – and not everyone wanted to have a large depot of gasoline in the neighborhood. So, in order to reduce fear and resistance, how should this place be labeled? A smart person had the solution – let’s call it a gas station, with an emphasis on the station, to be able to capitalize on the societal utility provided by fire stations, train stations, and police stations.

 

Researchers have identified one particular mechanism behind the influence of labeling. It is called priming. The theory is that if one particular label for a product (or a person) is conceptually or semantically similar to existing categories in our brains, exposure to the label can make the material in the existing category accessible. And if this material has a positive affective charge, this charge can bounce back and influence our view of the labeled object so that is viewed in positive terms, too. Typically, this is an automatic process, in the sense that we may not be aware that it has been set in motion.

 

In the light of this, and returning to the labelling of those customers who participate in a loyalty program, one possible solution is to label them “members”. However, this is a somewhat odd label, because “members” in a typical loyalty program have very little in common with members of a group or an organization in a more traditional and real sense. For example, real members in a management team, a government, and a family may interact frequently in order to reach common goals, and in this process, they may become very close in terms of social relations. This, however, rarely happens for “members” in loyalty programs.

 

In any event, and from a priming point of view, it seems possible that the label “member” for participants in a loyalty program can make accessible material in the general member category in our brains. And this category is typically full of associations to positively charged aspects such as belongingness, togetherness, and closeness, which represent benefits of real membership as well as benefits that most people would want more of in their lives. So, one would expect that the charge of this material could have a positive influence on people’s views of “membership” in a loyalty program. I had a chance to do some own empirical research on this, and it turned out that this is how the label “member” seems to work on customers. Thus, “member” can be a wise choice for those who need a label for participants in loyalty programs. Similarly, when the program itself is labeled, it is probably wise to use labels such as “club” or “family”.

 

Before one gets carried away by the marketing possibilities of labeling, however, it should be observed that there are people out there who may think about some labels employed by marketers are deliberate attempts to mislead and obfuscate real meaning. Another word for labels used for such purposes is euphemisms. The novelist George Orwell, who was concerned about the use of language in totalitarian states, referred to euphemisms as a weapon that can “make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind”. Seen in that light, and in an era in which transparency and authenticity seem to be important values for customers, marketers should be mindful of what they do with words so that they do not become labeled euphemism users.

 

 

Magnus Söderlund

Professor of Marketing and Head of the Center for Consumer Marketing (CCM) at the Stockholm School of Economics.

 

 

Reference:

 

Magnus Söderlund (2019) Can the label ‘member’ in a loyalty program context boost customer satisfaction?, The International Review of Retail, Distribution and Consumer Research, 29:3, 340-357, DOI: 10.1080/09593969.2019.1598469