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.
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.
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:
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.
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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.