Handling the Fallout of a Loyalty Promotion SNAFU
Mistakes can happen, it is human nature. However, when companies make a noticeable mistake it can gain attention from a global audience. Bloomingdales recent email promotion glitch is a prime example.
On August 14, renowned retail store Bloomingdales sent out an email promotion, accidently giving some loyalty program members nearly $25,000 in credit. Bloomingdales representatives stated the mistake was spurred from a system malfunction, which converted loyalty program points into dollars. While all the online orders have been canceled, one shopper visited Bloomingdales in Manhattan, and left with a $10,000 pair of diamond earrings, a $5,000 watch and a Louis Vuitton bag.
A spokeswoman for Bloomingdales told BuzzFeed, “A small subset of Bloomindale’s Loyalist participants were accidently issued rewards gift cards with amounts that were clearly incorrect. The company caught the mistake and is re-issuing replacement cards with the correct amounts. The company is in contact with its customers and has apologized to those affected.”
As for the shopper who used Bloomingdale’s accidental error to their advantage, spending nearly $17,000 on merchandise, the company has offered him a $100 gift card if the items are returned to the store. Bloomingdale’s also stated if the items are not returned, he will be removed from the loyalty program, but he was not the only loyalty member who acted on the promotion error.
Another customer who spent $2,100 of her $10,000 reward shopping dollars before the mistake was fixed, went to Facebook directly commenting on Bloomingdale’s not honoring the “big promotion” they had offered. “Bloomingdales, you are a big company. You have many faithful customers. And one thing that most customers expect is that if you make a mistake, even one of this magnitude, that you will honor it.”
Other members who were affected by the promotion, went to their social media accounts as well, creating a flow of negative tweets and comments about their frustration with Bloomindale’s big promotion mistake.
A simple mistake, even if it is the “systems” error, can jeopardize valuable customer’s loyalty and negatively alter their engagement levels. If an error, such as Bloomingdale’s promotion happens to your company, it is important to take immediate action and solve the issue with the customer in mind. Planning for the worse, prior to sending out big promotions, is the best way to stay ahead of threatening mistakes. Create a plan of action that follows the below five steps, in order to ensure a smooth transition in fixing the issue.
- Act promptly, but calmly. While it is important to act on issues immediately, the process needs to be effectively communicated and fully understood to those employees who will be working on fixing the problem. Review the overall objective with the designated team assigned to solve the issue as soon as the problem is noticed and ensure full comprehension for the plan of action.
- Inform subscribers of mistake immediately. Before responding to any negativity in the media, first inform the subscribers who were directly affected. Apologize for the inconvenient mistake and explain the situation so they can properly understand the error.
- Offer an apology incentive that is justified. For example, in April Lucky Brand Jeans accidently published an online promo-code, which was initially directed to only employees. The promotion offered two pair of jeans for two cents. While Lucky Brand could not follow through with the two cent jean promotion for customers, the company offered those who had already acted on the promotion a hefty discount on any pair of jeans they wanted. Some consumers only paid $20 for a pair of jeans that was originally $100. Many of Bloomingdale’s customers complained the company’s additional offer to the mistake was not justified, even though the promotion was a mistake. To clean up the error appropriately, you will need to give customers an incentive that is equal to, or more than the initial promotion.
- Take advantage of social media. The social networking world has made it easy for consumers to negatively, or positively, comment on a brand or product. Respond to tweets and comments appropriately, showing that the company is truly apologetic and is taking immediate action to solving the issue the best it can. Successfully solving mistakes that can go viral is all about how companies communicate with customers.
- Use analytics to measure its reach. Monitoring the overall reach of the promotion will help control the damage it has caused. See how many subscribers clicked and acted on the promotion so you can better understand how to solve it before word spreads to a global audience.