In today’s world where experience is everything, we all know that an individual can make or break the customer experience, writes Melanie Parker, founding director of Stream Loyalty.
A more engaged and motivated workforce will lead to better retention, saving the business time and money on recruitment and inductions. Even if you ignore the fact that staff turnover costs time and money, an engaged and happy workforce will have a significant impact on customer experience.
When asked what leaders could do more of, in order to improve engagement, 58% of respondents replied: “give recognition”. An internal reward and recognition programme should be considered as a part of a larger employee retention and engagement strategy in order to fully reap the benefits in your business.
Reward and recognition, what’s the difference?
Rewards are the physical, hard benefits (technology items, experiences, etc) that are given to your employees. Usually, they are more memorable to the recipient as they’re tangible items and have an economic value; and in the case of experiences, they can even foster lifelong memories.
Recognition, on the other hand, is one of the soft benefits that add emotional value and attachment to the company. Recognition is the emotive behaviour that represents the business culture, such as announcing accomplishments and praising behaviours or actions.
Rewards are usually associated with achieving targets, and therefore are more anticipated than recognition. Neither should be run in isolation; they work best when designed to complement each other when highlighting appreciation to employees.
If your budgets are stretched across multiple departments, and rewarding employees is where you’re falling short, then start by introducing a recognition framework which will cost you nothing. Set the structure for recognition at the outset, so that your team understand how and when recognition might be received.
Could you introduce a mechanism for employees to recommend their peers for recognition? This can often bring a bigger feeling of pride than being recognised by a manager. 41% of companies that use peer-to-peer recognition have seen positive increases in customer satisfaction.
Once you have the recognition framework in place, then you can build up to the rewards. A targeted and measurable reward programme can start with a small budget. Running a rewards programme alongside a long-term retention plan will be worth your investment.
Brands need to make sure that they are considering employees needs and how to create culture and engender loyalty. An internal reward and recognition programme can be the first step towards a larger loyalty culture strategy designed to thank employees.
Essentially, looking after your employees has never been more important. With the rise in remote and hybrid working, employees have access to a much wider job market than ever before. As cost-of-living rises start to impact employees (and we haven’t even seen the worst of it yet), introducing a loyalty programme with reward and recognition at its heart will help support them through the tough times ahead.
Using Employee Loyalty to Promote Advocacy
If you believe in loyalty as a business and the benefits it delivers, then you need to manifest the principles throughout the business with both your staff and your customers. Whether the audience is internal or external, the same concepts of behaviour change and loyalty are the same. Engage, reward positive activity and recognise those people who are important to your brand and then reap the results.
We are big advocates of using loyalty for both your employees and your customers. Although the metrics will be different to suit the activity required of each audience, using the same techniques will ensure that your employees are able to sell the benefits of loyalty to the customer. Loyalty for your employees will have far reaching benefits over and above just improving employee retention. 84% of people trust recommendations from friends, family, colleagues over other forms of marketing.
Examples of activity you could reward, outside of general day-to-day work tasks:
- Referrals – customer and employee
- Content Sharing – social engagement or sharing of articles
- Testimonials – video, audio or written testimonials that can be shared
- Reviews – written reviews that can be used the business or reviews on a specific platform
Content shared by employees attracts 8 X more engagement than that shared by the business. Word of mouth advertising from your employees can have a big impact on new customer acquisition. 61% of consumers are more likely to research a product or service after seeing a friend’s social media post about it.
Getting Started with Employee Loyalty
There are numerous ways to get started with loyalty. You can either put a tender out to external loyalty agencies, or platform providers, or you can create something internally. If you decide to use an external agency to help you with the strategy, implementation and launch, then have a look at some questions we would recommend asking those agencies. This article also includes some things to think about, should you decide to run the programme in house.
Agree the behaviours and actions that you want to reward. We have provided some examples above which you might want to include initially. What is the value to the business of each behaviour and action? For example, if an employee provides a video testimonial what value does the business place on that activity.
Once you have identified the activities and the value, then you can start to build a financial model for the programme. Make sure that, when you model the return on investment, you consider what would happen if the programme were to become too successful. This sounds ridiculous, but if all your employees start completing the activities and earning rewards will the programme still be deemed successful?
Highlight the KPIs (key performance indicators) for the programme. What output will mean that the programme can be seen to have been a success? How long do you envisage that process taking, and what happens if the timeline extends or is met early? If you are using an external agency, then they should assist you with answering all these questions. Make sure that you have the data available to monitor, and that the actions are measurable, to enable you to easily assess the programme’s impact.
Create an employee focus group which will act as the voice of the employee throughout the implementation, and beyond, if that is feasible. You should use this group to assess the rewards, behaviours, actions and tactical delivery of the programme.
With everything that we have mentioned already about the rising cost-of-living, inflation being at an all-time high and employees’ salaries being stretched ever tighter, think about the rewards you can offer. We always talk about making them meaningful, but this is now going to be more relevant than ever.
Rewards that help the member to stretch their monthly budgets:
- Discounts on utility bills
- Discounts on supermarket shopping
- Discounts on insurance products
- Monthly petrol budgets
- Gym membership
- Extra holiday
- Access to staff benefits
Rewards that provide the luxuries which we might all have to do without for a while:
- Lifestyle products
- Group or personal experiences
- Travel and holidays
- Technology products
The final key thing to consider is how to design the tactical delivery of the programme. There are numerous platforms around to tap into which feature all the employee loyalty and customer loyalty tools that you would need. Consider how the programme will be able to grow with you, as your loyalty maturity grows, so that you don’t have to re-platform in the future.
- A great customer experience is crucial to creating sustainable brand loyalty. Without the positive reinforcements and interactions of your staff, you will struggle to achieve an outstanding customer experience.
- Introduce recognition and rewards to generate brand loyalty, but start small and don’t dive in without testing the market.
- Employee advocacy can be a great way of encouraging customer acquisition.
- Employee loyalty can generate higher engagement with customers.
- Link your employee loyalty programme to your customer loyalty programme to create a joined up, shareable experience.
Let your employees be a positive voice in the marketplace, because they believe in what you are trying to achieve.