Inviting Loyalty

Are customer loyalty programs worth it or just a flashy gimmick?

Insider

Contributing Writer

The importance of building customer loyalty for a company cannot be stressed enough. Companies that build a loyal customer base can reap benefits like having insulation from competitors poaching business, acquiring repeat business, and having clients that will be their biggest advocates and brand champions. For any company, having customer loyalty is the dream scenario, however it can be challenging to figure out the best way to create a customer experience that drives customers to come back time and time again. Often companies will turn to the creation of a customer rewards program or a customer loyalty program, which, in theory can be a great way to keep customers coming back by providing them with perks and discounts for bringing regular business. When done right, these programs can boost customer satisfaction and improve customer retention. However, it’s important to develop a program that provides customers with rewards they will actually use and truly want. So how can companies create a customer reward or loyalty program that is more than just a quick gimmick?

Give the People What They Want

When it comes to a rewards program, your mind may immediately go to traditional e-commerce perks like discount codes that give you money off your next order or small gifts to show appreciation for repeat business. However, in the mortgage industry, it’s likely that a company that is looking to build out a rewards or loyalty program will have to think outside the box because standard rewards like a 10% off coupon simply might not be an option.

It’s important that if you are looking to build out a program for your organization, you are thinking about what would actually incentivize your clients to continue to work with you rather than you assuming and offering things that you think might move the needle. Think about what your clients’ pain points are and what you could offer through a rewards program to make their lives easier. For example, if you deal mainly with wholesale clients (like mortgage brokers), they are likely always looking to expand their book of business. What better way to help them expand their client base — while also creating opportunities for you to field that newfound business — than to throw exclusive networking events in their area and invite their ideal customers. You could also identify events that already exist that would provide similar benefits for your clients and cover the cost of their event tickets.

Think about what your clients’ pain points are and what you could offer through a rewards program to make their lives easier.

Another idea could be to provide a tailored client experience as clients bring more business to your organization. What better way to address customers’ pain points than by providing a higher tier of customer service every time they bring you business? Aside from carving out dedicated resources for these clients, this could be a great opportunity to go that extra mile for your top clients and retain their business and customer loyalty. This category of reward could also include a forum for them to be able to provide product or program improvements and get early access to test things out or access to senior leadership to provide input that could also help your business improve. There are many options that aside from providing an ear and facetime with the appropriate members of your company could be a great perk.

Weigh the Cost

One thing to keep in mind as you are identifying potential rewards is that you are calculating how much business a client would have to bring in to make sure you aren’t breaking the bank with the perks you are providing. One of the best ways to balance out the cost of the reward versus the business you’re receiving is by creating different tiers or levels for a rewards program. By creating different tiers within your rewards program, you also incentivize clients to bring more business to hit higher tiers and receive more substantial rewards. It gives your clients something to work towards and if the perks are enticing enough, it ensures they will keep their business with you to hit those higher tiers.

If you are looking to build out a program, think about what would actually incentivize your clients, rather than you assuming and offering things that you think might move the needle.

As you are building out a rewards program, conduct a cost analysis to ensure your costs will be covered at every tier. As previously mentioned, also consider adding rewards that do not have a high monetary cost associated with them to keep reward program expenses down. Review the resources you already have within your organization and connections you have within your industry (think discounts for other services your clients might need) to see how you might be able to tap into those opportunities and offer them as perks. Whatever you do, just make sure you aren’t setting your reward program up for failure by offering rewards that cost you so much that you aren’t making a profit despite the additional business.

All You Have to Do is Ask

When done well, a customer reward program can be a great way to increase client satisfaction and customer loyalty. Avoid hastily creating a program and take the time to develop something that your clients will actually enjoy and provide them with real benefits. If you are struggling to think of rewards that your clients would like and benefit from, a good way to start the development of a program like this is to conduct a customer survey. Ask customers what they like about working with your business and where things could be improved. Asking questions about what pain points they have and what resources they wish they had access to to improve their own business can be a great starting point for developing a rewards program. Listen to what your customers want, avoid gimmicks, and then you can create an impactful rewards program that can pay dividends for your business.