Having a well planned and executed Customer Strategy should be the litmus test for the efficacy of today’s corporate marketing department. Think you can live without it? Then ask yourself why companies are putting more choice in consumer hands each day and striving to gain perspective on customer preferences via blogs and communities.

Whether a Loyalty program should be part of the Customer Strategy is continually up for debate. My old friends at Colloquy have long postulated that “Loyalty is a tie breaker”, citing distinct circumstances that loyalty can and cannot influence. The assumption is that industries which are highly competitive and are approaching commoditization can leverage a loyalty program to their advantage. Caution is encouraged as shortfalls in brand image, product or service quality, pricing, or even physical coverage of a geographic area will limit the impact of even the most compelling loyalty program.

I have been studying loyalty programs across vertical industries and have a pending research paper which will outline a new set of best practices for the business. Look out for the related white paper, coming soon. In the meantime, I had to share my experience with two big box retailers illustrating how pricing anomalies can constitute one of those hurdles that even a well done rewards program cannot clear.

A simple home project caused me to seek out a 25 foot section of CAT5e networking cable. Since I needed to buy some office supplies and like Worklife Rewards, I headed into Office Depot to knock off my to-do list. There I found two choices of cable, with Gray or Blue being my color choices. The $31.99 price point seemed high, but I trusted ODI to be true to their big box origins and tossed the cable into my cart.

The need for some way to neatly attach the cable to the wall led me to Home Depot as nothing of the sort was available at ODI. Within 30 minutes I was staring at the clips I needed and, OMG, the exact cable just purchased at a price of $14.98. Not only could I save big bucks, but the cable came in white, a much better choice for my application.

Giving Office Depot the benefit of the doubt, I hope that I stumbled onto a true exception. I can understand price variances on individual items within a reasonable range, but this was a shocker. I left with the suspicion that ODI must provide certain items as “convenience purchases” to their shoppers and exacts a premium price in return.

Whatever the explanation for this huge price differential, this was an un-welcome wakeup call to a loyal customer. I felt betrayed. Where Worklife Rewards had lulled me into a willingness to give the chain a broad share of my home and office spend, I now was wondering how much those points were really costing me.

All things being equal, Loyalty programs are supposed to break the tie. They are intended to redirect consumer attention from price to free program benefits. My experience snapped me out of my loyalty trance and rerouted my brain to more carefully evaluate pricing of any significant item. More importantly, my confidence in taking a relaxed approach to shopping in this store was shaken.

Transparency and trust are two essential elements of building long term loyalty. I hope that these items are not “discontinued merchandise” at Office Depot but only “temporarily out of stock” >>>> Bill Hanifin