Why Customer Loyalty Programs Often Fail Before They Begin

In Blog Posts by graz_admin

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Connecting the Dots between CX and EX

To create customer enthusiasm that leads to brand loyalty and brand ambassadors, your employees have to feel that enthusiasm first. Brand ambassadorship begins inside a company. In fact, creating a positive employee experience (EX) is essential to creating a positive customer experience (CX).

The problem

Global studies show that customer centricity is a priority for many companies. Yet, the direct correlation between CX and EX is missed by many. Customer-facing employees, such as account executives, sales people and customer service personnel must exude the positive feelings you want your clients to feel when working with your company. They are your “front line” contacts and should be your first brand ambassadors. Companies struggling with declining revenue, client retention or brand image do not connect the dots to these catalysts.

Further, an employee does not have to be client-facing to create a positive or negative impact on a customer. Consider the employees that build, package or ship your products. They have an equal opportunity to convey a consistently positive CX through the quality and integrity of what they do. Disgruntled or disengaged employees that do not care about their work or your clients can cause a negative impression by how they do their jobs.

Gallup estimates that only 34% of US workers are engaged in their jobs. One-third of employees are somewhat engaged, and another third are disengaged. The disengaged group poses the most danger to a company by their actions, or lack thereof.

Given those stats, it should be clear that employee engagement or EX should be as much as a priority as CX. Very often though, C-suite executives incorrectly view both of these initiatives as “nice to have” budgetary considerations. In reality these initiatives have a direct impact on revenue, retention and brand image. Thus, many customer loyalty programs are destined to fail before they launch, because enough attention has not been given to building enthusiasm for brand, message, mission and company loyalty on the inside of an organization.

Why this happens

Two of the main root causes that undermine an otherwise well-considered customer loyalty program are communication and leadership, especially where the two intersect. When companies fail to execute in these two areas, there will almost always be a negative impact with employees.

Clarity of Communication:

1) Brand message and mission should be clear from bottom to top of the company and conveyed in myriad ways

2) Set accurate expectations when an employee is hired

3) Engage in regular dialog with employees on a departmental level about mission, goals and their role in the productivity plan

4) Appreciation should be shown regularly in varied ways that appeal to the age/diversity of a company’s workforce

5) Conduct frequent (not just annual) “pulse” surveys with employees to gauge morale, mood and concerns

6) Encourage innovation and sharing of ideas

7) When tough choices and/or changes must be made, they must be well communicated to employees first

Strong Leadership:

1) Proper training of new managers and ongoing education for senior leaders

2) Weed out disengaged workforce

3) Fair expectations of productivity

4) Awareness to motivate and inspire

5) Visibility and interaction with all levels of employees

6) Transparency

7) Responsiveness to concerns and situations

8) Lead by example

 

Failures in Communication or Leadership Have a Negative Impact on Customer Loyalty Programs

In each instance above there is the potential for far-reaching problems in an organization. With respect to derailing a customer loyalty program, if your employees don’t feel that they are part of the success and mission of the company and cannot embrace the enthusiasm to create a positive customer experience, it’s an uphill battle from there to create loyalty.

Failures in communication and leadership will also lead to issues with attracting and retaining top talent, which causes increases in operating costs, reduced productivity and a decline in the overall Customer Experience.

How Leaders Can Create Customer Loyalty Programs that Work

The first step in any customer loyalty program must be to extend the same loyalty to your employees – your “front line” – that you extend to your customers. Employees should know that they are a part of the success of any customer-facing programs. Assess communication and leadership business practices with your employees’ experience in mind. Create Brand Ambassadors from within first, to ensure they share the enthusiasm you want your customers to expect by working with your organization.

Note: This article, written by Denise Graziano, first appeared in Business2Community:

http://www.business2community.com/loyalty-marketing/customer-loyalty-programs-often-fail-begin-01610998#I4qoESgRmISEkU64.97