-How a telephone company misrepresented its reward for customer loyalty

A representative of my broadband provider telephoned and proceeded to congratulate me on being a loyal broadband customer. Yes, I agreed readily. She indicated that the company wanted to reward my loyalty with a discount on monthly broadband charges. Great News I though! This caller not only got my attention, but gained my interest.

Next she stated she will need to go through a few questions with me. At first this seemed a reasonable request, but as I considered this a seed of suspicion was sown. Why, I asked myself if I was being rewarded for loyalty does she need to ask further questions before she could indicate the level of discount I would receive for this loyalty. I gave voice to my thoughts and in response to my question she replied that changes could not be made to my broadband account without my permission. Still seemed like a rational request, despite the seed of suspicion germinating in my thoughts. Nonetheless, I agreed to answer her questions.

Well it’s, the first one that caused me to loose any desire for whatever reward she was about to offer for my loyalty as a broadband customer.

She asked “Will you be renewing your broadband contract for another 12 months?”

Contrary to the caller’s assumption, I do not make decisions about entering into new contracts without first understanding the terms. Neither would I decide to extend a 12 month contract with a utility provider in a 90 second conversation.

What the caller had done was to impose conditionality in offering me a reward for loyalty. In business, rewards for loyalty should be unconditional. Rewards are not based on what you will do in future, they are a consequence of what you did in the past.

In that moment, I recognised also that what the rep had phoned to offer was not a loyalty reward but an incentive for customer retention. There is a significant difference between the two. The former rewards past behaviour, the latter provides an incentive for further positive action.

Here was a telephone provider that was unapologetic about the fact that the company’s focus was on sales not service to customers. The marketing department or the company putting together the marketing campaign failed to recognise that with excellent/exceptional customer service –additional sales are generated automatically directly from the current clients and indirectly from referrals made by those clients.

If your organisation considers customer service to be a key part of your business success, then your marketing strategy should be consistent with this, not contrary to it.

Here are FIVE key points marketing departments and companies should remember when developing the telephone script for the marketing campaign:

1. Rewarding customer loyalty is ‘unconditional’. Loyalty is based on past actions and rewards should be offered without any conditions. This, however, does not prevent companies from providing incentives for customer retention.

2. Providing incentives to loyal customers is an effective way of encouraging them to use your services in the future. Incentives for customer retention should be in addition to, not in place of or a replacement for rewarding customer loyalty. Indeed, in some circumstances, incentives can be provided instead of a reward for loyalty.

3. If convinced you provide a high quality of service to customers and would score high in customer service surveys, you can feel confident that not providing a reward for customer loyalty would not dissuade your customers from accepting an incentive for continuing to do business with your organisation.

4. Companies with less than satisfactory quality of customer service have reason to be cautious about providing incentives only. Such businesses may want to consider offering both rewards and incentives to customers. Rewards would then be used as a way of compensating customers for providing less than satisfactory service. In addition to promising improvements to the customer experience, you can also provide incentives for customers to continue doing business with you.

5. Find out what are your customers present needs and what you can do to improve customer satisfaction. Customer services surveys provide invaluable information on what else can be done to improve the customer experience and exceed customer expectations.

By rewarding the past, providing incentives for the future and addressing present views and needs, businesses are well on their way to ensuring not only high levels of customer satisfaction, but even greater levels of customer retention and increasing frequency of customer referrals.

Another group of key ingredients in the recipe for ‘Staying ahead of Competitors’.