The Latest Incentive Industry Resources & News

Wednesday, August 9, 2017

The State of Customer Loyalty

Why is it so hard to gain loyalty? What makes a loyalty program attractive?

Customer Loyalty

A recent report from Colloquy provides information on the state of Customer Loyalty. Here are some key findings on customer loyalty programs from retailers, the travel and hospitality industry, and financial services as well as emerging programs in entertainment and other industries:

  • Although loyalty memberships are up 15% from two years ago,
  • The majority (54%) of loyalty memberships are inactive

Why is it so hard to gain loyalty? The members who are not participating in loyalty programs say these are the reasons why:

  • It takes too long to earn rewards
  • They don’t appreciate or find value in the rewards
  • The company sends too much communication
  • The communication isn’t relevant
  • 26% opted out of the program because there was no mobile app available

What does make a loyalty program attractive? Members say: 1) it’s easy to use, 2) it’s easy to understand, and 3) the members receive great discounts.

The Role of Employee Recognition and Engagement

The link between recognition and employee engagement is well documented, but what role does employee engagement play in the customer experience?

Highly engaged employees impact the customer experience and, accordingly, customer loyalty in the following ways:

  • Better Customer Service. Highly engaged employees are focused on the customer experience and "sweat the small stuff" by paying attention to the smallest details.
  • A Better Brand Experience. Engaged employees love what they’re selling and are typically trained on their products and services (either formally through the organization or on their own) so that they are providing information that the customer can use to make their decision. Engaged employees understand that, although they are the embodiment of the brand, it’s ultimately all about the customer.
  • More Customer Focus. Highly engaged employees design better customer loyalty programs. It’s also critical that the support for an exceptional customer experience is driven from the top down. Company leaders who encourage team members to craft consumer programs are laser focused on the customer and explore how they can continue to provide value in exchange for loyalty.

Engaging the Consumer in Loyalty Programs

Technological advances continue to provide the ability to increase personalization and offer real-time loyalty point accumulation, as well as redemption. The Colloquy report tells us that the majority of consumers will still trust an organization with their personal information in order to register for a loyalty program. Colloquy offers these tips to make our programs attractive enough to keep the consumer engaged and earn their loyalty:

  1. Create loyalty to the brand rather than just the program. If discounts are the only thing attracting members, you won’t be able to create real engagement. Some brands further engage loyal customers by turning them into brand ambassadors.
  2. Make the redemption the experience. In most programs, all of the excitement is geared around the accumulation of points. Make the celebration around the reward redemption.
  3. Eliminate pain points. Structure your program so that it removes some negatives in the customer experience. (Starbucks reduced the problem of long lines by offering a way to "skip the line" via their mobile app).
  4. Continuous improvement. Technology is ever-changing and will continue to offer new ways to improve and personalize the customer experience. Don’t just "set and forget" your customer loyalty program.

Because we know that customers quickly disengage when they are bombarded by too many messages or by irrelevant messages, it’s clear that execution of loyalty programs is critical. It’s not just about what message is sent or how it is communicated – it’s about how the message is received by the consumer.

Create a customer loyalty program that is customer-focused, easy to use and understand, and provides real value, and you’ll earn loyal customers.

Monday, July 31, 2017

Culture, Engagement, and Performance

A Unified Experience


There are many studies and articles that talk about ways to build a corporate culture, to increase employee engagement, and improve employee performance. But no one of these can be achieved in a silo. Culture, engagement, and performance are all part of a single unified experience.

A recent Forbes article suggests that if you work on the company culture first, increased performance will follow. Likewise, the link between employee recognition and engagement is clear. One cannot be achieved without the other, however, so company leaders who recognize this and work on all three elements as a single entity will lead.


A company's culture is built through engaged employees who feel emotionally invested and appreciated, and the way in which companies reward and recognize their employees is an indicator of the culture. All three are interconnected, and nothing happens until your employees are recognized and rewarded for accomplishments.

Creating a culture of recognition by unifying recognition programs under one umbrella is a good start. Often, organizations have a number of different recognition programs (formal or informal), to the point where it’s difficult for the employees to know what’s expected of them.

Prospective employees now consider culture to be as important as competitive salary and benefits – and will sway the decision if everything else is equal. World at Work reports that 14% of companies already list culture among their advantages with prospective employees.

Employee Engagement

Despite increased attention to employee engagement activities by corporate leaders over the past several years, the majority of U.S. employees (51%) remain disengaged, according to Gallup. This has resulted in a greater focus on more tangible outcomes. Properly structured reward and recognition programs achieve greater results across a variety of metrics, and engagement scores increase as employees feel appreciated and recognized for their accomplishments.

The shrinking talent pool is of great concern to employers, so attracting new talent and retaining current key employees is now a top priority. Engaged employees stay longer, achieve greater results, and become advocates for the company.

Some ways to increase employee engagement are:

  • Use the right employee engagement survey. The data collected must be specific, relevant, and actionable.
  • Set the tone from the top. Company leaders and managers should work with employees to identify barriers to engagement and identify opportunities to affect positive change.
  • Select the right managers. Not everyone is cut out to be a manager. Hiring a manager (or selecting one for your engagement/recognition efforts) requires specific skills that not everyone possesses. Make sure you’ve got the right managers in place who want to see the employee succeed and will help them identify and maximize their strengths.
  • Coach your managers and hold them accountable. Enable managers to play an active role in planning recognition and engagement programs. Great managers accept that measurements move company goals forward and will accept accountability for results.
  • Relate engagement goals to everyday activities. Make engagement activities meaningful within the employee’s work day. Describe what success looks like and show examples of the behavior that is expected.

Performance Improvement and Employee Recognition

In addition to contributing to company culture and engagement, employee recognition impacts:

  • Employee turnover and tenure
  • Employee morale
  • Productivity
  • Reduced safety incidences
  • The customer experience and loyalty
  • Market share
  • Profitability

Formal recognition programs allow the organization to communicate their goals and priorities. Employees will pay attention to what is measured and analyzed. Likewise, a properly-designed employee recognition program will include a communication platform between employees and management.

One study from Deloitte found that the majority (87%) of employee recognition programs still focus on longevity rather than performance. Company leaders who want to achieve performance gains can accomplish this through performance-based reward and recognition programs.

10 Commandments of Employee Recognition

  1. Easy to use
  2. Credible (authentic)
  3. Timely and frequent communication and recognition
  4. Integrated throughout the organization
  5. Aligned with the brand, values, and mission of the organization
  6. Supported from leadership
  7. Personalized
  8. Rewarding (appropriate to your audience)
  9. Transparent and visible
  10. Fun!

It's not you, it's me

The United States are “enjoying” the lowest unemployment rate in decades — but for the companies that cannot find talent, not so much. Company leaders may believe that they have an employment problem, when the problem may be that they do not have the systems in place to effectively attract, engage, and retain key talent.

Business leaders who understand the relationship between culture, engagement and performance improvement will be at a competitive advantage. Rather than considering these as three separate initiatives, understand that they are intertwined and all play a role in a coordinated business improvement effort.


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