Is it worth spending money to build the engagement and loyalty of employees, channel partners or customers? Obviously our answer is going to be a definite yes. Not just because it’s what we do, and have done on more than 1,000 programs, but because we’ve seen the results of those programs.
But before we get to the end results, let’s consider where they start.
When we think about why we got into this business, it wasn’t purely for business. At a very basic level, the philosophy that our entire industry is built on might be summed up in the adage, “one good turn deserves another.”
When you do something kind for someone – whether it’s affirming them, lending them money, helping them with a chore, or supporting them through a hard time – you make an emotional impression on that person. That makes them positively disposed toward you in future, and more willing and ready to reciprocate.
Now, cynics might say that a more appropriate adage is “you rub my back and I’ll rub yours,” which is rather transactional. It’s true that some loyalty programs might feel like this, and those programs might even work. But, in our experience, these transactional programs aren’t the best ones, nor the most successful. Nor are they the ones we aspire to create.
The programs we want to build are about making human connections, building mutually positive emotions and even, yes, sharing the love.
This is why employee engagement programs aren’t simply about rewards – they’re primarily about recognition. They’re about one person saying to another, well done, or great work, or even a simple thank you. Why? Because when that happens, the recipient of that recognition feels something. She feels valued. She feels appreciated. She feels worthy. That act of simple recognition triggers feelgood hormones – and not just for the receiver, but for the giver, too.
Now, it may be harder to replicate those feelings in other contexts, especially when a massive program is run at scale. Customer loyalty programs, for example, can have millions of people participating. And the interaction is often between customer and business, or customer and brand, rather than between two individuals. But that doesn’t mean businesses or brands can’t make their customers feel appreciated.
When a customer is acknowledged – whether through a note of thanks, or through the awarding of points or rewards, or through a personalised gift based on their likes and preferences – they, too, feel acknowledged and valued. They, too, have their feelgood hormones triggered. They, too, feel positively disposed toward the business or brand that recognised them.
Neurologist Donald Calne said that while reason leads to conclusions, it’s emotion that leads to action.
In our context, those actions are acts of loyalty – whether to an employer or employee, business partner or brand. They are shown in more diligent and careful work; in less absenteeism; in enthusiasm toward and about you; in faithfulness or exclusivity to products or brands.
And while the feelings of love or loyalty may be “soft” and hard to measure, the actions that they lead to certainly can be quantified. The investment that you put in – emotional, financial or other – is reciprocated or returned with actions that have financial value.
And of course financial value matters. It’s how we run a successful business. We don’t expect our clients to be sold on feeling good alone. Nor should they be. They should be confident that what they put in they will more than get out.
The fluffy, feelgood part of loyalty and the financially fruitful part are not mutually exclusive, nor are they trade-offs or choices. The better the emotional connection made, the better the return on the investment is likely to be.
In this issue of The Loyalty Lighthouse, we look at both the softer, qualitative and the tangible, measurable returns that businesses get on their investment in employee, channel partner and customer loyalty.
For example, we look at The business case for employee engagement, outlining examples for two different size organisations, explaining how we arrive at an investment amount, itemising different areas of the business that should improve, and providing realistically calculated values for each of those.
In Channel incentive ROI: the short and long of it, we examine the immediate returns that can be gained from channel incentive programs, while making the point that short-term returns alone are short-sighted, or perhaps not ambitious enough, because there are more sustainable and more valuable long-term returns to be had.
In Customer loyalty and ROI: why retention eats acquisition for breakfast, we compare the relative cost of acquiring customers versus the cost and value of keeping them, and make the compelling financial case for investing in customer loyalty.
And, finally, in The ROI of reward: how to justify incentive travel to your CFO, we tackle some of the reservations or objections that businesses might have to spending money on incentive travel, while outlining its value.
We think these are compelling reads, from both emotional and financial perspectives. As always, we’d love to hear any comments or questions you may have. If you’d like to engage about the articles, feel free to email andrews@awards.co.za.
