Miscellaneous
Employee Loyalty 101
Here are basic principles to consider when starting an employee or customer loyalty program
August 10, 2010
Length of service awards have typically rewarded commitment and loyalty, but the employee-employer relationship is not what it used to be. Layoffs and job hopping have taken a toll. However, recognizing an employee’s commitment to an organization is still important. Here are two rules to keep in mind when creating an employee loyalty program.
- The pendulum will never swing back to your grandfather’s time. Don’t wait 25 years to offer service recognition. Start right away. New employees who receive an award after a few months on the job will feel like they belong and this can help reduce turnover.
- Recognition programs engender loyalty. Nothing makes employees feel like staying put more than knowing that the organization values their contribution. Always have in place a program that rewards employees for accomplishments.
Customer Loyalty
Implement a rewards program into your marketing plan. It costs a lot more to gain a new customer than it does to keep a current one. Here are four steps to follow.
- Determine how much your customers have to purchase to receive a reward. For example, you can require 10 points to receive a reward, and give your customers one point per purchase. Another option is to give your customers a point for each dollar amount that they spend. So, if you require a $10 purchase to receive a point and your customer spends $75, they receive seven points.
- Decide what your reward will be. Some companies choose to give a percentage off a future purchase while others prefer to knock a dollar amount off a future purchase. The more your customers have to purchase to earn the reward, the larger that reward should be.
- Promote your program. If potential new customers know that you offer such a program, it may convince them to shop with you instead of with a competitor.
- Don’t forget the employees’ role in building customer loyalty. No program can succeed if the employees in the organization are not customer-focused. Tying a customer service program targeting employees to a customer loyalty program will boost the impact of both initiatives.