Operational Customer Loyalty Program – How it Works in Practice

We often meet organizations that explain that they are already using NPS as, for example, part of an existing customer survey or an annual questionnaire. In theory that is not wrong, but what we emphasis is how a loyalty program can generate far greater value when it is conducted with a simple and efficient method as NPS and across the entire customer relation.

WHAT IS AN OPERATIONAL LOYALTY PROGRAM?

Fundamentally, it is when a customer loyalty program is becoming a clearly defined process and an sustainable program, instead of a one-year project that becomes an integrated part of customer focused work processes. An example on the first step towards a more operational customer loyalty could be when the annual or half-yearly customer survey, that would typically be sent to all customers, is converted into an on-going measurement. This could happen by dividing the customer base and sent out questionnaires to less, spread out across the year. There are many advantages and gains by adapting a more operational loyalty program where the loyalty survey and the customers feedback is received in smaller portions. That means that the program becomes more dynamic and relevant. In doing so, interacting with customer loyalty does not just become an annual thing, which will spike the interest for the program, and thereby for the customer focus, in the entire organization. Another significant gain from operational customer loyalty is the follow-up. If you are only measuring rarely, the follow-up will become a backlog that will interrupt daily work and the follow-up will likely be delayed by the responses. With responses ongoingly flowing in, the follow-up will become a natural part of the employee’s everyday work and the customers will experience the follow-up to be more relevant when it is conducted more rapidly. In the ideal operational program relation surveys (the overall NPS-score) are spread out throughout the year. The timing can either be random or, even better, it is timed with the relation’s lifecycle. This could be a specific number of months after a customer has arrived, a specific number of days since the last purchase, a specific number of days before an appointment is renewed etc. Later, we will touch on how that type of surveys that can be automated.

WHAT IS THE DIFFERENCE BETWEEN RELATION SURVEYS AND TRANSACTIONS/TOUCHPOINT SURVEYS?

Following the timed relation measurement, the question about the difference between relation measurement and transaction/touchpoint measurement arises. If a customer is asked about loyalty and feedback immediately after a transaction, the NPS-rating would most likely have been affected by the actual experience. The following response from the customer will also to a large degree be influenced by what the customer has just experienced. This can be used to build an oversight of the customers experience in specific transactions/touchpoints. These are certainly not to be mixed together with the overall relation measurement and NPS, as it is an expression of the relation as a whole and not the specific experience. This is why relation-NPS and transaction-NPS should be totally separated. For the majority of our clients, transaction-NPS has actually completely superseded traditional questionnaire surveys with many and, for the customer, less relevant questions.

GAIN MUCH MORE – WITH MUCH LESS

Almost every day we are in dialogue with clients that wants to use NPS but feels the need to ask additional specific questions. Often because they have done so traditionally and now, they have added NPS. They fear that they, with a solely NPS-based solution, will lack responses to specific questions. Initially, it is a bad solution to mix questionnaires with a simple and efficient loyalty program. First and foremost, it is extremely difficult to truly operationalize a survey with multiple specific questions. The organization will drown in data and especially the automation will be impeded. Secondly, the relation will be stressed by difficult responses and it is hard to ask frequently across the customer journey. With an NPS-based survey the customer is inclined to respond more often and present an unreserved and objective opinion in the free comment section. This is where almost all clients experience that they, with a simpler survey, actually receives more feedback because the customer has focus and the mental surplus to respond exactly what means something to the them. It comes from the outside and in, not the other way around.

CUSTOMER EXPERIENCE RADAR

With an NPS-based loyalty program, it is thus possible to harvest input from customers both in relation and transaction/touchpoints. Good and bad experiences can be identified across the customer life cycle. We see this as your customer experience radar that keeps track of experiences throughout the customer journey and where you can put the efforts by individual action or transformation. Is your customer experience radar also only lighting a few times a year? Imagine if the military, or others, used their radars the same way! Previous: Well-functioning customer relations. Next: Customer Loyalty – The key to increased turnover and earnings.

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