Rewarding Your High-Value Customers

 

Most organizations around the world have an ‘Employee of the Month/Year’ award. This prestigious award recognizes exceptional service made by the employees to the organization. These awards not only give recognition to the employee but also set gold standards for other employees to perform better, in order to win the award.

Rewarding high-value customers yields a similar effect as rewarding high-performing employees. In 2021, when every other brand has a loyalty program, how do you achieve a competitive edge? Rewarding your customers is a great way to ensure customer retention, however rewarding your high-value customers can prove to be even more beneficial in improving the overall brand value.

In this article, we answer the pressing question ‘Do rewards create loyalty?’ and give you tips to identify high-value customers and to reward them suitably.

Do Rewards Really Create Loyalty?

One of the most frequently asked questions by budding entrepreneurs is ‘Do rewards really create loyalty?’ to which most seasoned businessmen would answer ‘Yes’. More than 90% of the companies have some sort of loyalty program, reports Accenture and the primary reason customers join a loyalty program is rewards and incentives.

The Wirecard report states that “75% of consumers say they are likely to make another purchase after receiving an incentive”. The logic here is simple, give and receive is the cornerstone of any healthy relationship. A reward is a great way of giving back to your loyal customers and motivating them to continue their association with your brand. Rewards and loyalty programs are designed for life cycle marketing which focuses on engaging a customer throughout its journey with the brand. Meaningful rewards, consistent engagement and a loyalty program that adds value to the customer’s life, stimulate brand loyalty that can go a long way in improving the brand value.

Identifying Your High-Value Customers

Imagine you work an 8-hour shift and your co-worker does a 4-hour shift, yet you both take home the same paycheque. Needless to say, it is unfair and you are undervalued by your employer. Identifying your loyal and important customers and rewarding them accordingly is crucial. Most telecommunication companies understand this and design a custom plan for their loyal customers based on their service usage. Listed below are a few tips to help you identify your high-value customers:

  • Retained Customers – Customers that have purchased from your brand for years are an asset. These repeat purchasers or retained customers are already loyal to your brand and are likely to remain associated with you for the coming years as well.
  • Big Spenders – They may not be regular with their purchases but these occasional customers spend a huge amount on your brand whenever they shop. These high-value customers are categorized as big spenders.
  • The Referrers – These customers are your brand advocates that bring in more customers and publicity to your brand by referring it to others. Word-of-mouth marketing is a powerful tool that helps with organic customer acquisition.
  • Active Participants – In the age of social media, when your accounts are flooded with messages, you can use this data to identify customers that routinely enquire about your products, actively participate in events and are subscribed to your brand on all your social accounts. These active participants have a high potential of turning into brand evangelists in the future.

 

Closing The Customer Expectation Gap

A value report by IBM Institute for Business Value states that, “76% of consumers expect organizations to understand their individual needs”. However, most customers are not vocal and refrain from offering feedback. Esteban Kolsky, Principal and Founder of ThinkJar, a research think-tank focused on customer strategies claims that, “A satisfied customer is bound to share his experience with 6 or more customers, while an unhappy customer will share his experience with 15 or more customers. The big problem here is that satisfied customers are not vocal. Kolsky also reports that most customers refrain from raising complaints to the brand, in fact only 1 in 26 dissatisfied customers raise complaints with the brand. This makes it even more difficult to resolve customer issues and meet their expectations. However, difficult it may be, closing your customer expectation and perceived reality gap is a crucial task that needs to be accomplished in order to improve customer satisfaction. You may be losing high-value customers for minor issues which the customers didn’t report. Hence, working on closing the customer expectation and reality gap is important and can help tremendously in retaining customers.

 

Smart Ways To Reward Your High-Value Customers

  • Give Them Status and Recognition – Everyone craves status and recognition and bestowing your loyal customers with a special status and exclusive perks is a great way to improve customer satisfaction levels. You could give them access to special events, pre-access to sales and offers and special discounts which will go a long way in retaining them. These special benefits can be aspirational to new customers and encourage them to repeatedly purchase from you and to attain special status from the brand.
  • Design Long-term Plans For High-Value Customers – Customers that remain associated with you for decades are priceless entities. To show gratitude and encourage long-term association, you could offer special loyalty plans that offer them or even their family members long term benefits. This will help with both, customer retention as well as acquisition.
  • Focus On Creating Experiences – Experiential rewards are gaining massive popularity in the loyalty industry. Rewarding customers with experiences rather than gifts is a great way to improve brand affinity and recall value. Rewards like paid vacations or travel coupons, dinner coupons can help customers to form a positive association with the brand and promote brand loyalty. To read more about how emotions play a crucial part in boosting brand loyalty click here.
  • Offer Personalization – Personalization in loyalty programs has a high ROI. Based on their purchases, preference and first -party data that you may have collected through your loyalty programs you can offer your high-value customers personalized rewards. Needless to say, they are more valuable than generic rewards and incentives and help to develop a strong bond between you and your customers.

To learn more about keeping customers happy, read our in-depth white paper.

How Can Annex Cloud Help?

Annex Cloud’s Loyalty Experience Manager can help you to identify your high-value customers and design loyalty solutions that help to improve their retention rate. Annex Cloud can help you with customer segmentation and tailored loyalty offerings to ensure increase in average order values and frequency of purchase. To connect with our Loyalty Experience Manager, click here.

 
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