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Staff and Customer Loyalty, What’s the Difference? – Customer Rewards

27 August 2014 by Andrew Johnson

Staff and Customer Loyalty, What’s the Difference? – Customer Rewards

Last week we looked at employee incentives and a few of the reasons behind how to make an incentive scheme work to its full potential. Today we are going to take a look at customer reward schemes, why they are successful in both acquisition and retention, and how to get the most out of them. There is also the question of how customer loyalty schemes should differ from the incentive scheme you are running for your staff.


We live in a time where information is extremely accessible and our competitors are exploiting this by making a switch in supplier easier than ever. With price comparison sites persistently stealing away your loyal customers for the sake of saving a few pounds, you need to look at how to prevent your customer base from jumping ship so readily.


You worked hard to build that customer base didn’t you? So why would you let it fall by the wayside and run away to your competition? This is where loyalty schemes really come into their own. Okay, so you may save £1 on your washing powder with ASDA, but they aren’t going to add to your Tesco Clubcard points which you can put towards your summer holiday. In the grand scheme of things which would you prefer, £1 off washing powder, or a holiday? Okay, so it isn’t an actual holiday, but it’s a contribution and it’s definitely more exciting than washing powder! In the customer’s eyes, it is washing powder versus holiday.


Keep this in mind when you create your customer reward scheme. Ensure your rewards stick in people’s minds, make them something they desire. Customer loyalty rewards are the way, the more expensive competitors, retain their customer base. Customers want to feel valued and this can be achieved through providing unexpected rewards at unexpected times. Don’t do this too rarely either, they may have moved to a competitor before you have chance to reward them!


A more long-term reward scheme is also a great consumer retainer, one that your customer can keep track of themselves and work towards a goal. This involvement in the reward scheme creates a loyalty beyond just shopping with you, the customer feels invested in the reward scheme and feels they will lose out should they move to a competitor before they have received their reward. This is what should structure your scheme, it should be long-term enough to promote this feeling, yet not unattainable so the customer feels they will never achieve it. The next step, once the goal has been reached, is to immediately offer an even better reward to work towards next; customer retention at it’s finest. Gift vouchers are a great way to make this type of scheme work, they are available in all denominations making both small and large rewards easily manageable. Manageability is key in this type of scheme as a badly managed scheme will reflect badly on the company and your reward scheme could have an adverse effect.


Not only do customer loyalty schemes help you retain your customers, your customers who are using the scheme will become your biggest brand advocates. They will stand up and defend you if something doesn’t go to plan and they will shout from the rooftops when things are going great. This is especially useful when it comes to your company’s reputation with potential customers. A potential future customer is more likely to trust the testimonial of a past/present customer than what you boast about your own brand.


Create a VIP club, you can either charge a one off fee to join, or grant access to your most valued customers and provide benefits that combat the usual barriers that customers face, for example, to VIP customers you could offer free delivery or prioritised order shipping. Take a look at Amazon Prime for an example of VIP treatment that works. Your rewards do not all have to revolve around money either. Take a look at the values of your main customer base and create rewards focused on these. We are often hearing that money does not motivate, so create something that appeals to your customers altruistic nature. Make them a part of something that will make them feel good, partnering up with charities and activist groups are a great way to instill this feeling.


The main difference between customer and employee rewards are the reasons for the reward. As mentioned in a previous post, employees want to be recognised for their hard work, whereas customers want to be thanked for their loyalty to your company. Bear this in mind when creating your customer reward scheme.


Have you thought about rewarding your customers for the following?


Recommending a friend to your company


Opening an account with you


Initially purchasing from you


Remaining loyal to your company


Speaking highly of the brand


Making large purchases with your company


Becoming a VIP member

About our blog

Andrew Johnson

Managing Director,
Voucher Express

Welcome to the Voucher Express Corporate blog. The perfect place to discover how, why and where to reward, motivate and inspire your staff and customers alike.

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