My CEO, Paula Courtney, recently wrote an article regarding the four major customer experience trends happening in 2019. As a follow up to her article, we thought we would dig a bit deeper into one of the 2019 trends which we’ve seen emerging for many years: reward and recognition (R&R) for customers.
Rewarding and recognizing employees in any business is a well-known and saturated topic. Business leaders by now understand how making their employees feel special results in higher work output. While these revelations have brought forth countless incentive programs, one question is left to answer: what about the customers?
The reality is that many businesses still don’t quite understand the concept of how reward and recognition (R&R) impact the customer experience. And, when companies realize that their clients feel unloved, they immediately try to resolve the situation. Unfortunately, a lack of knowledge in the area and a rushed solution usually results in making matters worse.
At The Verde Group, we consistently evaluate the customer experience and loyalty dynamic of customer to business relationships. In our work with clients, we’ve observed a strong relationship between their reward/recognition policies and their product/service performance. We noticed a few key factors:
– Companies with fewer problems in core products and support services also have less dissatisfaction related to customer reward and recognition. Conversely, those with more product/service dissatisfaction have greater reward/recognition dissatisfaction.
– Companies that improved core product/service performance simultaneously enjoyed a lift in reward/recognition performance even if they took no specific actions to change their reward/recognition programs.
– Companies that focused on improving reward/recognition without addressing issues in core product/services areas created more dissatisfaction with reward/recognition.
Now, we are still seeing a high number of dissatisfied customers in regards to reward and recognition. So, we conducted some additional analysis using our Customer Pulse Database, ensure that your customers feel loved is still a key driver for success. First off, 86% of the respondents indicate that they have experienced a problem, any problem, with a company. Let’s take a look:
1. 43% of the respondents who report experiencing a problem with a company specifically cite reward and recognition as one such problem.
2. 80% of the respondents who have not experienced a problem are very/somewhat satisfied. Meanwhile, 45% of the respondents who expressed a problem with R&R said they are very/somewhat satisfied. This means that R&R problems have a direct correlation to customers’ satisfaction level.
Yet, reward and recognition problems also have an impact on the likelihood to continue to do business and or purchase additional products.
3. 89% of those who didn’t cite any problems said they probably or definitely will continue to do business with the company. On the other hand, only 65% of respondents with R&R problems said they will continue with the company.
4. 47% of those who didn’t cite any problems said they would probably or definitely purchase additional products compared to only 24% of customers if they reported a problem with R&R.
5. 64% of the clients who didn’t have any issues with reward and recognition said that they definitely will recommend the company compared to 57% if they cited an R&R problem.
From the database, it becomes clear that getting the basics down pat is the main contributor to increasing the relevancy of reward and recognition. More so, the main lesson here is that customers want to know that businesses appreciate them. A little can go a long way when it comes to R&R. The rewards don’t have to be extravagant, but rather, have a meaningful impact. In the end, rewarding and recognizing your current customers generally provides a better customer experience, resulting in higher levels of loyalty and spend.