Loyalty programs can play an important role in enhancing the customer experience. They are there to provide customers with value and solve problems, to help companies acquire and retain and ultimately build stronger relationships with their most loyal customers.
But what if the journey never begins?
What if the customer never sees the value in the loyalty program or the problems it could solve for them?
What is there for a company to retain if there was nothing acquired in the first place?
How can a company build brand loyalty without customers?
A relationship does not come before the first connection.
Why some loyalty programs fail
Brands often overlook the critical importance of staff and employees in the success of a loyalty program, both customer-facing and the internal business – the first connection needed to start the journey.
Frontline staff effectively function as loyalty program ambassadors. As the face of the company and a direct line of influence, their knowledge and enthusiasm for the program are critical to member acquisition and engagement.
Consistency (aka repetition) is key. Customers should be made aware of the loyalty program upon every visit, this ensures any member or potential member is always aware and reminded, working towards building a behaviour. Some industries will be more reliant on staff to promote the program, especially when there is face-to-face interaction, such as a QSR or in-store clothing retailer.
If staff do not champion the program or cannot succinctly answer program-related questions, the likelihood of success will erode. It is worth noting, a total reliance on frontline staff to promote a loyalty program is not recommended as this can impact other areas of the service – a holistic viewpoint is always essential.
Moreover, many companies fail to recognise that internal stakeholders are just as critical. A successful program takes time and investment, and therefore requires commitment and buy-in from management across all facets of the business.
If there are sceptics amongst key stakeholders, try and get them on board early in the journey. The most successful loyalty programs in history have always been accepted and deeply embedded across the company.
Everyone has an opinion, and everyone has goals and objectives – acknowledging these can help to uncover opportunities for a loyalty program to stimulate customers and enhance the customer experience across each touchpoint, big or small.
How to succeed where your competition may fail
Employee engagement can increase productivity and reduce turnover, but also impact customer satisfaction; engaged employees have been shown to improve the overall customer experience, with a direct positive effect on sales.
Correspondingly, increased levels of empathy have been measured in loyal customers, leading to an improved working environment for employees; in turn, motivating employees to address the needs of customers better. It is a virtuous cycle known as the ‘Loyalty Empathy Effect’.
What can a brand or company do to avoid staff and employees failing a loyalty program?
- Commitment: without a commitment from the whole company, management included, a program is likely to fall apart. As loyalty consultants, we’re often brought in to help redesign or ‘bring back to life’ an existing program which has fallen by the wayside. In the early stages of discovery, it becomes quite apparent if a loyalty program is suffering because there isn’t enough buy-in from the top, or different opinions are crippling what would otherwise be a great program.
Everyone needs to see the value of the program and understand how it will benefit their individual goals, and the grander picture – the grander picture being to deliver an exceptional experience to the customer.
- Training: employees must understand the program in-depth to be able to respond to customer questions, know how the program can benefit customers, and more importantly, recognise their own role and the role the program plays for the company.
Whether the employees are frontline staff or internal employees, education is essential for everyone to remain on the journey, this includes keeping everyone up to date with any changes to the program and the long-term evolution.
- Bonus or incentives: employees are a highly influential touchpoint for customer evaluation and conversion, and while it is their job to represent the brand and deliver exceptional service, an extra incentive or reward can sometimes be helpful to support a loyalty program. It can also increase employee favourability of said program.This does not necessarily advocate for a simple cash giveaway for program sign-ups, in a study of employee benefits programs, Jeffrey (2004) argued that cash is not always the best extrinsic incentive to use.
The important questions for a brand to ask itself are: what are employees rewarded for (i.e., the desired result or behaviour)? Is it ongoing or a short-term play at launch? What is the reward? Is it commercially viable? Does it make sense for our brand or industry?
Loyalty programs do not succeed purely on design. A brand can put a lot of time and effort into bringing something to life – only to fall flat because nobody knows about it. If people know about it but do not talk about it or a brand is inconsistent with its messaging, feelings of ‘what’s the point?’ or ‘is there something wrong?’ will seep in.
Execution and awareness are essential, and these are both guided by staff and stakeholders.
Perfect design does not always lead to the perfect outcome. There is no point in having the perfect loyalty program that your frontline staff know nothing about or that top management do not believe in.
A loyalty program which no one knows about or believes in is destined to fail.
Scott Harrison is a Strategy Consultant at Loyalty & Reward Co, Australia’s leading loyalty consulting agency. He has worked in several marketing and design roles across various industries including eHealth, property, and financial services. As a Strategy Consultant, Scott applies his skills across all aspects of the business, including loyalty program design, member engagement, loyalty strategy and customer experience development.
Scott co-created the book Loyalty Programs: The Complete Guide, the most comprehensive book on loyalty program theory and practice available. He also presents a number of modules as part of the Loyalty Programs Masterclass run by Loyalty & Reward Co in conjunction with ADMA.
Let’s connect: https://www.linkedin.com/in/scott-c-harrison/
 Harter, J., 2017, ‘The Right Culture: Not Just About Employee Satisfaction’, Gallup, https://www.gallup.com/workplace/236366/right-culture-not-employee-satisfaction.aspx, accessed 20 April 2021.
 Snively, E., 2021, ‘The Loyalty Empathy Effect’, Chapman & Co, https://www.linkedin.com/pulse/loyalty-empathy-effect-evan-snively/, accessed 11 March 2021.
 Jeffrey, S., 2004, ‘The Benefits of Tangible Non-Monetary Incentives’, Incentive Research Foundation, https://theirf.org/research/the-benefits-of-tangible-non-monetary-incentives/205/, accessed 15 June 2020.