Saturday, July 5, 2014

Ranks, Loyalty Programs, Marketing, and You

For those of you who don't know me well, let me give you a little of my professional background.

Most of my professional career has been in marketing.  My area of concentration for much of my career has been direct marketing (direct mail and email), database marketing (customer segments and analysis), and loyalty program marketing.  I have worked inside the "guts" of major loyalty programs.

At one point, my day job.

I've actually been a marketer longer than I've been a martial artist, and thus, a large portion of my brain has been dedicated to thinking about this stuff for a long, long time.

To teach the martial arts, we have to obtain and maintain a place to teach, we have to manage our books and pay our bills, we have to create and maintain quality martial arts instruction, and we have to grow and retain our customer base, just like any small business must. Oh sure, we have our own quirks inherent to our business, but at the core, we are a small business, just like the restaurant or the accountant's office or the preschool or the gym.
As you can see, our one-step performance is declining at at alarming rate.

One key point I mentioned above, one that is very important is this one:  we have to grow and retain our customer base if we want to keep teaching the martial arts (aka, stay in business).

We can do this in a variety of ways:

  • Competitive and fair pricing.
  • Well organized and quality curriculum.
  • Good reputation and visibility in the community.
  • Excellent customer service by being responsive and supportive of our student (and parent) community.
  • Marketing to let potential students and their parents know you exist, and what you offer.
  • Keep a well maintained, clean, and orderly training space.

Another is by using one of the best methods in the marketing playbook - having a loyalty program.

Which brings me to ranks.  Oh boy, do we martial artists love discussing ranks.
I'm sure we could generate a huge discussion on this picture alone.

Rank discussion invariably pops up on  just about every martial arts board or discussion forum you'll ever run across.
  • Who deserves it and who doesn't
  • What a person should look like at any given rank level
  • What it takes to earn it
  • What it means to hold certain ranks
  • How many there should be, and why
Not all martial arts have ranks, but they're popular for a variety of reasons.  One thing that is often left out of the discussion is its function in the small business of the dojo as a marketing tool - or rather, as a loyalty program.

Good loyalty programs typically have the following features:
  1. Incentives for frequent visitation
  2. Aspirational goals
  3. Rewards for engaging in certain preferred behaviors
  4. Clear and concise methods for achieving additional rank and rewards
  5. Tiers with increased rewards when new tiers are achieved
  6. Enhanced status within the program or community when tiers are achieved
When you think about it - doesn't this sound like ranks and how they function in martial arts schools?

In order to gain rank, students must attend frequently, practice, pay attention in class, work hard, and of course, pay school dues.  Or to put it another way - be a good student (or in business terms - a good customer), and they are rewarded not only with knowledge, but with the symbolism of rank.

One thing that is also important in tiered loyalty programs is the maintenance of status for the upper tiers.  People who gain high status tiers must feel like it's worth the effort to obtain and maintain tier - that it can't be just given to anybody who hasn't earned it.

Again, doesn't that sound like making sure your belts are earned, rather than bought, especially if you want to retain students at the black belt ranks?

We can debate ranks all day long, but at the end of the day, most potential customers expect there to be some rank structure, as it's become as inherent to the martial arts business as loyalty programs have become to casinos, airlines, and hotels.

So when you think about rank, don't forget this aspect - the loyalty marketing aspect - in your school.

If you want to learn more about loyalty marketing principles, you can start at Loyalty 360 and Colloquy.