"The 19th-century satirist Ambrose Bierce defined fidelity as 'a virtue peculiar to those who are about to be betrayed,'" writes Joanne Kaufman in the Wall Street Journal (2/19/10). This came to mind, for Joanne, when her son came home from a trip to Duane Reed and reported that her loyalty card was no longer valid. It seems the retailer was in a blackout period pending regulatory approval of its acquisition by Walgreens. But when the new program was introduced, the terms had changed.

It used to be you'd get a five dollar coupon for every $100 spent; now she has to spend $250 for the five-dollar gift. Unfortunately, this wasn't an isolated incident. Joanne had also paid $25 for a Starbucks card offering two free lattes (one for signing on and the other on her birthday), plus ten percent off every drink. This was working out great until Joanne's daughter came home with news that Starbucks had replaced the program "with a tiered system of rewards involving stars."

Under the new plan, Joanne gets a star with each transaction, and a free drink for every 15 stars. It doesn't matter if each transaction includes several drinks. A company spokesperson told her, "We wanted a program that was more inclusive. And the new card is free." Except it really isn't because it only works if you load the loyalty card with cash. As Joanne notes, "Just think of those stars as the chain's way of thanking caffeinistas for what amounts to an interest-free loan," adding, "You're welcome and you'll find me at Dunkin' Donuts."

The problem with catalogs is that they work, suggests Jeffrey Ball in the Wall Street Journal (10/16/09). While it may be true that less than two percent of catalogs result in a sale, that's plenty good enough. It seems that "glossy catalog pages still entice buyers in a way that computer images don't ... Among retailers who rely mainly on direct sales, 62 percent say their biggest revenue generator is a paper catalog," according to the Direct Marketing Association.

The U.S. Postal Service, which has a pretty big dog in this game, says it's done a study showing "that consumers who received catalogs from a retailer spent 28 percent more on that retailer's Web site than those who didn't get a catalog." And it's a lot of catalogs: "More than 17 billion catalogs were mailed in the U.S. last year -- about 56 for every American." Which is a lot of paper: "In the U.S., catalogs account for three percent of the roughly 80 million tons of paper products used annually," according to RISI Inc.

This, of course, upsets environmentalists, some of whom think there should be a "Do Not Mail" list like the now-famous "Do Not Call" list. That, in turn, upsets the Postal Service, which says that all those catalogs subsidize the price of a first-class stamp. A Postal Service spokesman also says that trees are grown specifically for paper, making them "renewable resources." Recycling isn't a great option because the thin, glossy paper favored for catalogs is "difficult to make from recycled fibers." But as far as Steve Fuller, CMO of L.L. Bean is concerned, "There will be some paper version for as long as I'm in business."

If you are a frequent flier on Alaska Airlines, get ready to feel the love, reports Scott McCartney in the Wall Street Journal (3/25/09). "After boarding, Alaska Airlines flight attendants deliver favorite drinks to elite-level customers when they are sitting in coach, thanking them by name for their business." Steve Jarvis, the airline's vice president of sales and customer experience explains: "The point is not the cocktail, the point is the recognition and thanks for your business."

The gesture is part of the airline's efforts "to improve target marketing to customers and offer more personalized service." It's still a work in progress, but Steve says Alaska is making a priority of improving its customer service by personalizing it. "We'd like front-line employees to know we lost your bag last time you flew, but it's just in different data sources right now." The challenge is that "Alaska has at least six different data systems housing customer information."

The goal isn't so much to create a "luxury" level of service, just the impression that they care. Kelly Hester of US Airways comments: "I truly don't see airlines ever getting to the level of, say, Ritz-Carlton, but that's not what our customers tell us they want ... Customers say they want a convenient, hassle-free experience rather than high-touch service, but there are definitely things we can do." Sabre's Tom Klein thinks such initiatives could also lead to service innovations and revenue streams. "I think you'll see a lot of experimentation," he says. ~ Tim Manners, editor.

When my daughter tapped into the US Airways kiosk at LaGuardia Airport, a screen came up informing her that she was too late to check in for her flight. This was perplexing because she was an hour early and this was just a shuttle. A closer look indicated that US Airways had made a mistake -- according to the kiosk she was booked on the 3:00 pm flight but in fact she had a confirmed, printed reservation for the 4:00 pm flight. US Air's response? A shrug.

Unfortunately, the 4:00 pm was fully booked so she'd have to take the 5:00 pm. The guy behind the counter said he had no idea why there was a discrepancy, that it must be a computer glitch of some kind. His supervisor said the same thing. Nothing could be done about it. Well, how about compensation of some kind, even a small gesture to show they care? Hah! US Airways's indifference would be remarkable if it weren't so typical.

It was quite a different story a few days earlier, when my computer's hard-drive crashed. No warning -- nothing. When I booted it up it just dropped dead, like a heart attack. My trusty Mac had let me down. The remarkable part of the story is that the guy at the Apple Store told me I shouldn't buy my new drive from him, that I could get a bigger drive, cheaper, elsewhere. I bought the drive from him anyway. Yes, it's true: Failure is a pivot point of loyalty. (your thoughts?) PS: Back up your hard drive -- now! ~ Tim Manners, editor.

That what people do is more meaningful than what they say is the premise of Proclivity Systems, which uses online behavior to figure out what customers will buy next, reports Eric A. Taub in the New York Times (5/19/08). Proclivity's approach is a departure from that used by e-tailers including Amazon and Netflix, which rely on past purchases and user recommendations. Problem is, maybe you bought that book for your grandmother or rented that movie for your grandchild the activity doesn't say a whole heck of a lot about you. Or maybe your taste in novels says nothing about what you favor in business books.

Even Netflix ceo Reed Hastings admits that while some five million subscribers have submitted some two billion movie ratings, his system has its limits: "I wish I could tell you that our recommendations system was reliable, but it's not perfect," he says. Netflix even sponsored a contest (link here) offering a $1 million prize to anyone who could improve the accuracy of its ratings system, but so far "only slightly better than a nine percent improvement has been achieved." Sheldon Gilbert, ceo of Proclivity Systems meanwhile achieved a 10 percent sales increase for Barney's by instead looking at "when a customer visited its site" along with demographic information.

For example, Proclivity focuses on information such as: "Does the customer buy only when an item reaches a certain price? Is the customer more likely to buy on a weekend or during the week? Must it be organic material?" Proclivity then targets its email messages only to customers who, based on past behavior, are likeliest to open the email, click through and make a purchase. "One customer found that 10 percent of its population accounted for 60 percent of bargain sales. So on the day of the sale, you can send a full-price ad to everyone else," says Sheldon. Not only does the company save money by sending fewer messages, but as Larry Promisel, vp of e-commerce for Barney's notes, it also creates customer good will by sending only relevant offers. ~ Tim Manners, editor

The best kind of customer service is not having to provide customer service, write Bill Price and David Jaffe in "The Best Service Is No Service," as reviewed by David A. Price in The Wall Street Journal (4/25/08). Bill Price should know because he used to be a senior-level customer-service executive at Amazon.com, which is of course considered by many to be a paragon of customer service. Amazon's focus is not only on making sure that customer service is handled as well as possible, but more important to try to eliminate the need for it in the first place. Amazon uses a metric it calls "CPX -- contracts per order, contacts per unit shipped, contacts per customer."

The idea is to get the number of contacts as low as possible meaning that customers need as little support as possible. This is not the way most companies look at it. At most companies, the focus is on making customer service as efficient as possible, which roughly translates into spending as little time on it as possible on it. The authors write: "The standard across most service operations is to report and track how quickly things were done ... not how well they were done or how often, or why they needed to be done at all." Companies might measure how many calls were picked up within three rings or how many emails were replied to within 24 hours, but not whether customer satisfaction was achieved.

Sometimes such measures can do more harm than good: "At one company where managers imposed a target 'average handle time' (call time) of 12 minutes, phone calls miraculously shortened to just under 12 minutes. As the 12-minute mark approached, agents simply said whatever it took to get the caller off the phone. The call center at an other company hit on the idea of reducing the number of phone lines so that the excess callers simply got a busy signal -- and went unanswered." Such metrics help explain why "three-quarters of chief executives in an Accenture study believed their firms provided 'above average' service. Yet almost 60 percent of those same firms' customers were upset with their most recent service experience." ~ Tim Manners, editor