Is this loyalty or bribery?

I cringe most times I read Brandweek and Adweek these days because the marketing campaigns and brand partnerships they write about seem mindless and meaningless. For example, a few weeks ago I read about Pizza Hut’s inaugural consumer loyalty program called "VIP". (VIP as in Very Into Pizza.)

The program works like this… a customer pays $14.99 to join the Pizza Hut VIP club for a year. Then for each home delivery or carry-out order of $10 or more, participants will be rewarded with a free large pizza (up to two free pizzas per month). And, just for participating, VIP members will receive one free order of baked cinnamon sticks or breadsticks. (Members will not automatically receive their free cinnamon sticks or breadsticks with an order. Nope. Instead, they will be mailed coupons to redeem with their subsequent orders from Pizza Hut.)

This VIP program is only in test mode, but does Pizza Hut really think it will build customer preference for their pizzas by essentially bribing customers to choose Pizza Hut?

I’d like to think that a more enduring way to build consumer loyalty for Pizza Hut would be to focus on making a better pizza or improving some aspect of the customer service experience (faster delivery time, improved in-store experience/home delivery experience, or better telephone etiquette when placing a delivery order.) Instead, Pizza Hut seems to be focusing on bribing their customers to be loyal.

Am I being too much of a marketing gadfly and missing how this program is going to build sustaining customer loyalty for Pizza Hut? Tell me I’m wrong in my thinking.

Comments

[Jackie Huba]

John,
You are right that this program is not going to build loyalty. In fact, it is not a "loyalty program" at all. It is a "frequency program." And it is as you say, bribing people to buy more, and more often.

Instead of taking time to build upon relationships with loyal customers who LOVE Pizza Hut pizza, they are appealing to the customers who go for the cheapest food and the best deals.

There's the a big difference in those strategies. And going with the "low price leader" strategy is best just saved for Wal-Mart these days.

[John Moore (the British one)]

It's bribery!

And fairly clumsy bribery at that. The frictional costs of all these programmes, taken together, must be huge, and it's a loss to society.

"Loyalty" is a word that marketing seems to have rebranded so that it doesn't mean what it used to.

[rose]

I manage a Pizza Hut , so I'm a little biased. The customers that i sell the VIP membership to so far have been my customers that I see every week. They are loyal and we know it. We can tell what time of day it is by some of them. They love the program from what they tell me. When they hand me their free pizza coupon, they are tickled.

[Jason]

A little late to be posting about this, but I found this site when seeking more information on the pizza hut vip program.
I would agree that it is not out to create loyalty to pizza hut, but to keep loyalty from those that already prefer pizza hut. I personally like PH because of the pan pizza. It is the only style I order from then, but you just can't find anything remotely as good as their pan pizza. If am in the mood for a different type of pizza I choose papa johns, and if I am just looking for the cheapest thing around I go for Little Caeser's (generally nasty) or Domino's.
Pizza hut has always been and will probably always be the most expensive mass pizza seller you will find. There is the exception of gourmet pizza makers like California Pizza Kitchen or Wolf Gang Puck, but they do not deliver to my knowledge.
In closing I personally order pizza hut because I like the taste and recognize that they have a style I prefer. The VIP program just allows me a bonus from time to time if I end up ordering twice a month. If nothing else I can get a set of free breadsticks once a month which pays for the membership itself.
Thanks to those that have read.

[Martin]

I couldn't agree more with Jason. I order pizza from all of the places that he mentioned from time to time. I prefer Pizza Hut (though Papa John's garlic sauce is considerably better), but they are the most expensive, yet I still order from Pizza Hut more than the rest. This program both rewards me for doing so. Nothing wrong with that, and if they pick up new customers in the process, good for them. Calling it bribery sounds like one has too much time on their hands.

[Jack]

I actually manage a Pizza Hut and honestly, this is the cheapest way to keep customers to ordering a larger percentage of their pizza orders from pizza hut. It's not bribery, we win because they order from us more and they win because they get free food. Enhancing customer experience is too hard/costly for such a large business outlet. Faster delivery time would include scheduling more drivers, and if you could see the profit margin of pizza hut, you would understand that the profit is low as it is. And improving phone etiquette is impossible because YOUR kids dont wanna be nice to people on the phone and read the phone script. I hear sometimes where i tell a customer its going to take 30 minutes for delivery and they exclaim "that long!?" when it takes 10-15 minutes to make the pizza and depending on where they are, anywhere from 2-20 minutes to get there.

[Vic]

I have long been a fan as Dominos was always late and cold and often wrong and papa johns doesnt deliver near me and peter pipers doesnt deliver. i have tried the program every time it was advertised and never got anything. considering i was ordering 2-4 pizzas plus other stuff a month. some months i catered for work and would order from 4-8 pizzas. win my loyalty...NO. lose it...YES. isnt there a law against false advertising?