Living on the Kickback
02/01/10 10:37 AM
There are many businesses who base their business model on the kickback. For those who do not know what I am talking about, it is the idea of bribing a customer for business with cash, gifts, or favors in return. We have competitors who live this way. They buy expensive gifts for their “customers” in hopes of keeping them “loyal”.
I have never been a big believer in the kickback. I feel that it builds a customer base who is not loyal for the right reasons but depends on those gifts and expects them. We have a loyalty rewards program which may be perceived as a kickback but is truly entirely different. A rewards program is something that is completely transparent. You know what you have to do to earn a reward, and everyone has access to the same rewards. There are no side deals, no special circumstances for one customer or another. It is all laid out so everyone can see it. This is designed to get a customer to come back to you, time and again, because you are striving to obtain a goal.
Kickbacks, on the other hand, are more under the table. You do not know what you are going to get, and you don’t know when you are going to get it. Because of this, they don’t drive more business your way. Instead they can actually be a barrier to doing business with you. Once you give a kickback, you are always expected to give a kickback. The next one, has to be bigger or better than the last. Where does it end? It ends when you stop doing it, either because it has gotten too expensive, or you have changed your way of doing business. The problem is your “loyal” customer who EXPECTS these kickbacks will jump ship as quickly as you change your business model.
They are not loyal because you service them well, or because you do what you say you will. They are loyal because they want a new set of golf clubs, or that trip to the Bahamas. We work hard everyday to do the right things to make loyal customers. We have fair prices, stock tons of product, and back it all up with great service. Mistakes happen, and we work to diligently rectify the issues. We believe that through these methods we will build truly loyal customers.
In building your own business you need to think about doing business the right way. Service the hell out of your customers, give them what they need to be successful. Once you open the door with a kickback, it is hard to take it away. You may be left paying for expensive things for the rest of your relationship, or being kicked to the curb if you have to stop. Maybe THAT is why they are called kickbacks!
Doug Jacobs
I have never been a big believer in the kickback. I feel that it builds a customer base who is not loyal for the right reasons but depends on those gifts and expects them. We have a loyalty rewards program which may be perceived as a kickback but is truly entirely different. A rewards program is something that is completely transparent. You know what you have to do to earn a reward, and everyone has access to the same rewards. There are no side deals, no special circumstances for one customer or another. It is all laid out so everyone can see it. This is designed to get a customer to come back to you, time and again, because you are striving to obtain a goal.
Kickbacks, on the other hand, are more under the table. You do not know what you are going to get, and you don’t know when you are going to get it. Because of this, they don’t drive more business your way. Instead they can actually be a barrier to doing business with you. Once you give a kickback, you are always expected to give a kickback. The next one, has to be bigger or better than the last. Where does it end? It ends when you stop doing it, either because it has gotten too expensive, or you have changed your way of doing business. The problem is your “loyal” customer who EXPECTS these kickbacks will jump ship as quickly as you change your business model.
They are not loyal because you service them well, or because you do what you say you will. They are loyal because they want a new set of golf clubs, or that trip to the Bahamas. We work hard everyday to do the right things to make loyal customers. We have fair prices, stock tons of product, and back it all up with great service. Mistakes happen, and we work to diligently rectify the issues. We believe that through these methods we will build truly loyal customers.
In building your own business you need to think about doing business the right way. Service the hell out of your customers, give them what they need to be successful. Once you open the door with a kickback, it is hard to take it away. You may be left paying for expensive things for the rest of your relationship, or being kicked to the curb if you have to stop. Maybe THAT is why they are called kickbacks!
Doug Jacobs