By John OxfordEven though rewards and loyalty programs are nothing new, how your bank, or partner-vendor, handles the users of these programs can make a major difference in your brand reputation. Whether you have credit card rewards, checking program rewards, old school travel club rewards or action-based reward giveaways and all types in between, there are a few things to take into account when running these programs.
First, realize that loyalty is a two-way street. If you are going to ask for loyalty in using your product, the customer should receive loyalty as well. For example, if I exclusively use your airline or hotel for points, you had better be flexible with my travel plans as I may have bypassed more convenient options to stay or travel within your brand. Thus, if you have a loyalty program, you may have to make exceptions outside of your mouse-type restrictions to keep folks happy.
This leads us to the customers who use rewards and value those rewards more than cash. The entire point of creating a rewards program is to build loyalty and continued usage of your product and services. If you reward your customers for their loyalty, you will no doubt have those who bank points for big and/or important occasions. These customers also tend to be some of your best customers because they are using your services more frequently to gain points and, qualitatively, they tend to tell others about their points.
I mean, who doesn’t like bragging about going on an anniversary trip or big vacation and not coming out of pocket for various aspects of your trip due to banking points or taking advantage of an offer. These customers hold those points near and dear until they are ready to use them, and you better honor their usage of these points and allow flexibility around them.
These customers do not need to be put through a long process when they have questions or need to make an adjustment. They are your best and most loyal customers (if they are not, you have set up your program wrong). You had better be there for them. They also make the loudest noise if something doesn’t go right because they have given you their loyalty and trust. They expect more. And probably deserve more attention as well.
Also, make your rewards programs easy to use and understand. If you find one that is easy to use, please let us know. Hotels have stays vs. nights and sometimes black out popular dates. Airlines may limit your choices or bump up the rewards price to take more out of your kitty. This was one of the reasons cash back became popular because that eliminated worry about snags in fulfilling your long sought-after reward points.
Don’t allow a local decision to ruin a profitable and loyal relationship. In this week’s Marketing Money Podcast, we talk about a hotel points cancellation during the pandemic where the local hotel operator would not refund the points but corporate stepped in and did because because of the value of the relationship. To clear up the cancellation and refund, it took four phone calls and nearly an hour of total phone time. This could easily have been fixed with a CRM profitability decision or realizing that if a customer calls with a large point bank on the line, probably best to work with them and not lose the business because, as we previously mentioned, those points are worth more in loyalty value than money.
Finally, if you embark on any sort of rewards plan, do your research. If it involves debit card usage, make sure you are not going over $10 billion in assets as that could greatly reduce your profitability. If you do not have the call center and technological infrastructure to handle servicing a rewards program, that can also be a red flag for launching one. And with so many rewards programs available, making one competitive and then marketing it is also something you must take into consideration.
Rewards programs are great for building loyalty and creating deep ties with your customers … if done properly. They are also fraught with peril if you mess them up. To hear more about our take on rewards programs, listen to this week’s Marketing Money Podcast with Josh Mabus of the Mabus Agency and me.