For our last dive into Shep Hyken’s ACA 2021 report, we’re going to take a closer look at rewards programs, and how they generate repeat business—and how this differs from customer loyalty. As we have in previous blogs on the ACA 2021, let’s first consider some numbers. Hyken asked his survey respondents to rank how important customer rewards programs are on whether they’re willing to give a company repeat business.
When we’re talking about rewards programs, picture customers earning points towards rewards and other perks. This can even encompass membership programs. According to the numbers, 74% of “Americans say that customer rewards programs are important when it comes to giving a company their repeat business.” This belief is strongest among Millennials, 83% of whom ranked it as either Important or Very important. (The other age groups also felt positively about this, sitting between 58% and 69%.) Compare this to the opposite end of the spectrum where no more than 7% felt these programs were Not at all important or Not important. That’s a strong bias towards these types of incentives.
This makes sense when you think it through, but many businesses still don’t offer any kind of rewards program to incentivize repeat business. Even something as simple as a stamp card that rewards deli patrons with a free sandwich after ten purchases goes a long way.
Repeat business is hugely critical, but Hyken takes the time to explain that we shouldn’t conflate repeat customers with loyal ones. “In other words, [a reward programs] is really a marketing program.” Hyken continues, “Customers will consolidate their efforts to do business with a specific company because of those reward perks. So, what happens if the company decides not to give any more rewards or perks to repeat customers? Will the customers keep coming back?” Maybe not.
But what about on the opposite end of the equation? “Maybe the business doesn’t have a rewards program, yet customers seem to keep coming back. Again, ask, ‘Why?’” Customers may shop at a business because of its convenient location or its low prices, but as he says, that won’t matter if a competitor opens a more convenient location or offers lower prices. “In both examples, the customers were not loyal to the company. They were loyal to the location or the price. That’s not loyalty. That’s repeat business.”
To understand what creates loyalty, Hyken tells us that we need to understand the emotional connection. “It can be a relationship between the customer and a salesperson or someone else in the business. It can be a cause that the company contributes to. It can be tied to trust and confidence, which are also emotions. It can be the overall perceived value of the customer’s experience, which can be tied to a combination of all these factors just mentioned and more.”
Recognizing the difference is key to how you develop your business’s loyalty strategy. Repeat customers are still quite valuable, as their consistent patronage is a crucial component of your day-to-day survivability. But you don’t just want to create a repeat business program, you want to create a real strategy for long-term loyalty, well beyond the day-to-day.
Hyken leaves us with this bit of wisdom: “don’t think of loyalty as a lifetime. Think of it as the next time, every time. Ask yourself what I refer to as The Loyalty Question: Is what I’m doing right now for my customer going to get them to come back the next time they need to buy whatever it is that we well?”
As always, the customer experience is key. Positive interactions, perceived value, and other important factors all play their part in creating a healthy and effective CX, and as Hyken explained, it’s something you have to keep working on again and again, each and every time. Good customer service isn’t a one off; it’s a habit. The best way to measure how well your business is doing in that department is with constant monitoring and training.
To accomplish that, you need mystery shopping. Companies like The Brandt Group send in local residents to interact with your business and employees to observe the little details that add up to the grand experience. What’s working well? What needs work? What are some ideas you haven’t even thought of? All these questions and more get answered with this world-class feedback. Pair that with surveys for both customers and employees, and you can get a complete picture of how your business is doing far beyond the scope of your financials.
Your bookkeeper can tell you a lot about where you’ve been and where you are—and they may even be able to forecast the future based on that information. But mystery shopping lets you create the future by arming you with the right tools to build it.
Want both repeat business and loyal customers? You should. Let’s get started on building that future today—and every day. Let’s get started!
