Blog: Best Practices For Rewards Programs And Customer Loyalty

I am frequently asked to comment on the many reward and loyalty programs that exist, whether they really drive customer loyalty, and the effect they have on the bottom line.

In general, rewarding frequent customers for their loyalty is a good idea. They should know how much you appreciate their repeat business and their referrals. Some of the best brands incorporate loyalty programs, such as Starbucks, American Airlines, and Hyatt.

The problem with rewards programs is they are easily copied by competitors. Where one brand has a points program, a competing brand has a points program too. Oh, and they are offering 30,000 bonus points to customers who switch. Don’t assume your rewards program is sufficient to keep customers—especially with 30,000 bonus points on the line.

So how do you earn the kind of loyalty that makes customers say, “I don’t care what the other brand is offering,” “I’m not going anywhere,” or “I’m not even looking”?

Intense Loyalty Is Powered by Frontline People
Customer service is the single best practice for your rewards program, whether your organization is B2C or B2B. The difference between a good experience and a great experience comes down to how customers feel about the person serving them—whether in person, online, or in a chat box.

Unfortunately, the service provided by frontline people varies widely. While every organization has pockets of great service, and even the worst hotel has a happy guest occasionally, loyalty-leading organizations are far more consistent in delivering great experiences to their customers. The best ones accurately measure who on the front line is doing a great job for customers and who needs coaching every month. These top-performing organizations also teach everyone the principles for earning loyalty: empathy, responsibility, and generosity.

Making sure the behavior of frontline people is consistently great is a much more difficult challenge than offering a rewards program, but it is worth the effort because it provides a durable competitive advantage. If your people consistently demonstrate empathy, responsibility, and generosity with customers, loyalty will be fueled through emotion in the heart—a much stronger magnet than the head rush from 30,000 bonus points.


About the Author
Sandy Rogers leads FranklinCovey’s Loyalty Practice. He was previously Senior Vice President at Enterprise Rent-A-Car. During his 14 years there, Sandy managed the turnaround of the London, England operation and led the teams that developed Enterprise’s marketing strategy and system for improving customer service across all branches. Before Enterprise, Sandy worked in marketing at Apple Computer and at P&G. He is graduate of Duke and Harvard Business School.

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