CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
The LA Times reported this month that, in an interesting move, AMC Entertainment, the owner of over 300 movie theaters including 25 of the 50 highest grossing theaters in the United States, is offering its most loyal customers a chance to own a piece of the company prior to their planned $368 million initial public offering. According to the article, in a letter to members, Chief Executive Gerry Lopez said “We’re offering this exclusive employee benefit to our AMC Stubs members to express our sincere gratitude for your loyalty.”
This ingenious idea does more than just offer its loyalty program members a special perk typically reserved for employees. It allows them to become stakeholders in the business. Nothing reinforces and strengthens loyalty more than when you own part of a company. These customers have been given an opportunity to achieve something that the average household wouldn’t be able to. Considering that many people don’t have investment accounts or stockbrokers which would allow them to buy minimal shares without incurring fees or requiring initial deposits to fund the account, the ability for the normal consumer to own a piece of the pie is attractive.
Disney runs a similar program that allows investors to purchase stock directly through them investing a minimum of $25 per month. Once the account has enough to purchase a share, Disney purchases it at the current market price for them and credits their account. As dividends are earned, they get reinvested into additional stock. One cannot argue with the level of loyalty in which Disney enjoys, that’s for certain.
Getting creative with how you reward your loyal customers is a great investment. As loyalty programs continue to flourish in retail, consumers now expect them. Sure a free bucket of popcorn is great but a owning a piece of the company is fantastic. Many of these loyalty members won’t buy stock in any quantity that would even register them on AMC’s ownership radar after the sale. There may even be limits to the quantities a single customer can purchase. Regardless, this is a creative way to get your customers invested in your company’s success with minimal cost.
Creating loyal customers is a challenge that businesses face continuously and also one that many business neglect. Without retention, a business cannot grow unless it’s acquiring new customers faster than it’s losing them and, for the most part, that’s a pricey growth strategy. AMC Entertainment has offered a loyalty program for years and the addition of offering those loyal customers this perk strengthens the sincerity of the program. This helps to elevate their reward program from one that is expected or normal to one that adds sincerity to their message of appreciation.
This is certainly not a replacement for providing a great customer experience. Treat them poorly and it won’t matter if they own a share in your company.