Employee Impact on Customer Loyalty

As the customer loyalty ecosystem expands more into digital environments and new technologies, these new elements provide a variety of benefits to loyalty programs. Changing technology continues to improve the loyalty environment, however, customer-facing employees can be brands’ strongest loyalty advocates, whether in-store or through a call center.

Loyalty360 spoke with several of its supplier partners to discuss the value of investing in employee engagement and where employees should fit in when it comes to a brand’s overall customer loyalty strategy.
Where Do Employees Fit in Overall Customer Loyalty Strategy?
With the influx of new loyalty technologies, customers are more connected to brands than ever before. While these connections can be highly valuable, brands should also keep in mind that one of the original loyalty builders is still one of the most important in overall customer loyalty strategy: the employee.

“Engaged employees provide top-notch customer service and can create an amazing experience for customers,” says Steve Palladino, Chief Growth Officer for Group FiO. This amazing experience encourages customers to return and increases Net Promoter Scores (NPS).

Eric Favaloro, Manager for Enterprise Loyalty Clients at Comarch, adds, “When things go smoothly, there will be no bigger advocates than employees who are also loyal customers. And when the experience isn’t so great, employees often have inside channels that they can use to alert the proper team and streamline improvements or bugfixes.”

As the front line of a brand’s customer interaction, employees provide some of the most effective marketing for a loyalty program and some of the best insight into customer pain points. Employees involved in and regularly engaging with the loyalty program advocate for the program because they directly benefit from it. Additionally, they encounter and understand issues with the program, allowing them to report problems and suggest improvements. When brands include their customer-facing employees in the loyalty strategy, Amy Farsht, Senior Director of Partnership Marketing for The Lacek Group, says, “Engaged employee members can garner useful consumer insights, act as an internal focus group for program features and benefits, and grow advocacy across channels.”
Helping Employees Advocate to and for Customers
In the conversation surrounding employee engagement with loyalty programs, there are still many brands do not allow employees to join their loyalty program.

“The main concern is that employees will use insider knowledge to ‘game’ the program and benefit from rewards that weren’t earned legitimately,” says Favaloro.

Cassie Preston, Director of Client Services, CRM & Loyalty, Baesman, adds, “It’s important to set expectations with employees of the brand when they enroll to avoid gaming within the program among employees.” Setting these expectations and holding employees to the same terms and conditions as regular customers allows employees to benefit from the program without taking advantage of it.

However, while gaming can be a concern, a brand that effectively engages and encourages its employees to use the loyalty program will see tremendous benefits from that engagement — especially when employees can use their discounts alongside the program. Not only will employees gain the added benefit of earning the rewards, but — with staff discounts — employees will move through the program quickly, making them better advocates to customers.

“Allowing employees to participate in the company loyalty program is a good thing since it can motivate staff and recognizes them by providing extra added benefits,” says Palladino. “Loyal employees will gladly promote your company on their own terms, building confidence with your customers in the process and resulting in a more positive customer experience.”
Managing Employee Buy-In to the Loyalty Program
When it comes to setting expectations for employee participation, engagement, and feedback, The Lacek Group’s Farsht says, “Communication is key.” Encouraging team buy-in involves helping members understand the value behind the program and reason why they should actively seek customer engagement with the program.

 “Knowledgeable and invested employees are empowered and equipped to create first-class experiences at each customer touchpoint,” Farsht continues.

Like any other company culture initiative, loyalty buy-in must come from executive leadership. All employees must see leadership acknowledging the value of the program and taking action to increase loyalty engagement through sign ups, sales, and other KPIs.

With this top-down buy-in, employees at all levels can see the value the brand places on loyalty. The goal of this kind of buy-in is to encourage the front-line and customer-facing employees to actively promote the program.

“Front-line employee engagement levels, whether in a store or a call center environment, can make or break a program’s success,” says Preston.  “That’s why it’s critical for brands to invest in the people tools and training to empower front-line workers to engage a brand’s most important asset: loyal customers.”

Part of this investment comes from involving employees in the loyalty program. The benefits they receive from earning rewards help build employee loyalty, work ethic, productivity, and better customer service.

“Engaged employees provide 10-30% better customer service than employees that are not engaged in the loyalty program,” says Palladino. As a result, engaged employees build a loyal customer base.
Measuring Employee Engagement KPIs
For brands choosing to include employees in the loyalty program, Loyalty360’s supplier members noted several important KPIs those brands should measure to track ROI on the engagement.

“Measuring employee enrollment year-over-year and how it correlates to employee turnover would be a very powerful metric,” says Farsht. “But specific metrics will vary and should be tied to organizational goals.”

Group FiO goes a step further, recommending that employee’s receive rewards when the customer loyalty program meets certain KPIs like:

  • Adding customers to the loyalty program
  • Revenue growth
  • Revenue per client
  • Profit margin
  • Client retention rate
  • Customer satisfaction
As mentioned previously, employees engaged in the loyalty program themselves help raise several of those metrics, so providing rewards for meeting goals is a natural extension and builds employee loyalty.

No matter how a brand decides to measure the success of its customer and employee loyalty initiatives, those metrics should encourage employees to accomplish the brand’s goals for loyalty.

“Front-line workers should always be asking ‘what’s in it for this customer,’” says Preston. “It’s all about maximizing on available traffic and leveraging relationship building with customers to drive deeper brand engagement.”

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