December 6, 2023

Mark Heymann, Founder of Mark Heymann & Assoc.

In today’s business environment, we often discuss engagement in conjunction with loyalty. We study whether our staff are engaged and assess the financial impact of different levels of engagement.

At the same time, we want to understand how loyal our team members are and how we can retain those people, especially in a very competitive environment. And while this discussion will focus on new methods to achieve these goals, I would suggest that, to a large extent, businesses have addressed these issues when it comes to their customers.

It is rare to consume a product without applying some measure of faith. And these measures of loyalty, while extremely important today, really began about 70 years ago with gold bond stamps and Green S&H stamps. Businesses gave these “stamps” to consumers to create higher levels of loyalty to their store or product.

In a recent conversation, I heard about a person’s mother who went out of her way to a grocery store in a different neighborhood because she got Green Stamps. Today, reward points are everywhere, points for using credit cards, for flying on an airline, for overnight stays, for discounted gas prices at a certain grocery store, and the list goes on.

Reward points are sometimes exchanged even for good service. During a recent bad hotel experience, the result was not a bill reduction but an allocation of additional reward points to appease me.

Getting extra reward points for minor or extensive inconveniences that were, in essence, poor service is commonplace today. Unfortunately, lack of quality is now often equated with the point of ‘compensation’.

While it’s probably a questionable long-term strategy, the key here is that in the B-to-C environment, loyalty is “bought” by accumulating points. If you have points from a certain hotel organization, will you switch loyalty because of a bad experience when high points levels get you free experiences?

The consumer has been fully taught the rewards for using the product and accumulating those rewards. It has become the paradigm of consumerism.

By now, you may be wondering how this relates to changing the employment relationship. The simple answer is that it’s time to change your B-to-B working relationship to a B-to-C union. Today’s customer example includes what our employees expect as consumers and how that drives loyalty.

Today’s highly competitive environment for employees, turnover costs, and the buyer’s rewarding expectation of quality requires a reexamination of this relationship, especially for the low-paid staff member. but this may be true on a larger scale. However, in the short term, the minimum wage needs to see a change in the value proposition of the employee-employer association.

Early in my career, I heard the president of a company speak at a CEO meeting. The comment from that meeting that I still remember is: “Guest relationships mirror employee relationships.” If you take care of your team, the guest will have an experience that will bring them back.

The 80s brought new terminology, and this time it was the “internal” and “external” customer— staff are the internal customer with the results being the same; they take care of the internal customer and they will take care of the external customer. Unfortunately, I believe we fully embrace these perspectives, but it can be fixed.

Let’s look at the internal client. As noted earlier, businesses strive for a committed staff member who demonstrates loyalty to the organization. This is the same thing we hope to achieve with consumers (external customers). Therefore, the new addition that will help strengthen the employee relationship is the introduction of a loyalty point system.

Many businesses expect that as long as staff are paid, everything else should just follow. We further recognize that work environment, communication, leadership, fair treatment and the like contribute to strengthening this relationship, but more can be done.

Under a broad heading, the approach I am proposing may well be characterized as “gamification” of the work atmosphere. And in many ways, it is. When organizations want to reduce accidents, they track the number of accident-free days and give out awards at specific time periods.

Competition and rewards, attendance points, customer referral points, exceeding performance points, shift pickup points, and so on—the key is to align performance with specific rewards that can be converted into something of value to the individual.

If you have a credit card and collect points, you can convert those points into cash or discount cards for stores or products that interest you. The same should apply to performance points. With these performance points, an organization can recognize staff in real time for the actions they take or the services they provide.

The other benefit of this approach is that if an employee has accumulated points and is approaching the next reward level, they may well think twice before switching to another company. Publishing data for people who are willing to show results can also act to incentivize performance, as we see in many game-oriented environments.

The additional cost of this approach will be offset by reduced turnover, improved customer experience, reduced credits or rework, and fully aligning the concept of internal and external customers with each other.

By adding loyalty points to already established employee engagement efforts, it will be clear to employees that the organization values ​​their relationship on the same level as the customer relationship. And this alignment will result in both top and bottom growth and overall value creation.

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