Just over a fifth of organisations (22%) rank customer experience as the single most exciting opportunity for the year ahead, according to a recent global survey of more than 6,000 marketers and internet professionals. 78% of companies agreed that they would be trying to differentiate through customer experience.
Businesses all face the challenge of fostering loyalty in a digital age that has seen the end of traditional brand loyalty as we know it. Consumer champions such as Money Saving Expert exhort customers to be constantly on the lookout for the best deals. Meanwhile, new EU rules could mean the death of cashback credit cards and loyalty schemes relating to cashback. Longstanding customer loyalty schemes such as RBS and NatWest Yourpoints have already been scrapped or changed. Delivering the best customer experience and getting rewards right has become increasingly critical if organisations are to keep ahead of the competition.
Marketers collaborating with HR
In many organisations, marketing is solely customer facing, but this needs to change if organisations are going to succeed in building loyalty through customer service. Marketers need to work with HR teams and internal comms people to ensure the link between brand values, good service and employee recognition is formalised. Together, marketers and HR can deliver employee recognition communications that embed corporate values and reinforce desired behaviours. This could be in the form of recognising Best Practice through case studies of employee successes. Getting employees onside and engaged with the objectives of the company translates directly to improved customer service:
Business units that scored in the top 25% for engagement had customer ratings 12% higher than business units scoring in the bottom 25% of engagement, according to a Gallup study.
There is a shift in focus to rewarding employees who demonstrate excellent customer service that aligns products and services to meet customer needs. Gone are the days where incentives were awarded simply for hitting sales targets. This led to much of the negative publicity surrounding financial sector mis-selling and widespread concern about misuse of incentives. Now, effective organisations focus on driving staff to go above and beyond customer expectations and ensure that customers receive the solution most suited to their needs. High value periodic employee rewards such as bonuses are less popular, replaced with more regular, targeted recognition and rewards that may even be a simple, free “thank you”. Peers and customers are as likely as managers to nominate staff deserving of recognition.
Enthusiastic product advocates
If employees become informed and enthusiastic product advocates, this has a measurable effect on the bottom line. According to Monetate, 73% of consumers would consider purchasing from a brand again if they had a superior customer experience, while John Goodman, author of ‘Strategic Customer Service’, found that customers who are delighted by proactive education or superior service are 10% to 30% more loyal than customers who have not been delighted.
Energy firm E.ON made a clear connection between employee recognition and customer service levels. Rated number one for customer satisfaction among the bigger energy suppliers for several years running they have seen Net Promoter Scores, a measure of customer satisfaction, increase by 11 points. Whilst one of many factors involved in this improvement, a formal employee recognition programme has made a significant contribution.
There is still an important place for customer reward schemes. While marketers have a good grasp of customer segmentation at the top of the funnel, a lack of understanding of rewards schemes and a reliance on a generic discount or a free gift is negating marketing efforts. Segmenting customers when it comes to loyalty can pay dividends.
“A PWC report found that rewarding the top quartile of loyal customers may account for 60% of profits. Moving mid-range value customers into that top tier is a key aim and loyalty schemes should focus on that.”
Both employees and customers’ value choice in the rewards they are offered. Gift cards, for example, while seen as a lazy choice for your significant other’s birthday, work well to reward employees for good work and to keep customers coming back for more as they build up their points to qualify for a range of gift cards. If rewards are seen as regularly achievable there will be no need to pay out for more expensive and lavish options.
Aligning the reward and recognition targeted at both employees and customers may mean breaking down some organisational silos, between marketing, HR, internal comms and even between sales and field staff. The reward for the organisation will be an integrated and engaged workforce, working as one to serve the customer, resulting in a loyal and increasingly valuable customer base.
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