The One Thing That Could Be Killing Your Loyalty Program? Poor Customer Service

Customer expectations have skyrocketed. More and more consumers want not only quality products but also exceptional service experiences. Retailers and marketers alike often focus on building customer loyalty programs to retain customers; however, there's a hidden threat lurking in the shadows—customer service. If your customers aren't receiving adequate assistance or solutions to their issues, then your customer service approach might actually be "killing" your loyalty program.

No matter how well people like your product, your customer service plays a significant role in their opinion of your company and program. Customers will not want to be members if they feel mistreated or their problem isn't handled properly.

Good Customer Service Matters For Growing Customer Loyalty 

Customer expectations have risen over the years. Customers today want brands to be responsive, empathetic, and consistent across all touchpoints. A study shows that after a good customer service experience, 42% of customers would buy that product again.

On the other hand, more customers now have a zero-tolerance policy for poor service. A single negative encounter can lead them to abandon a brand, regardless of the rewards offered. 50% are more likely to share their negative experience on social media after a bad customer service experience. 

While loyalty programs are designed to reward repeat purchases and foster customer retention, they can fall short if the service experience doesn't meet these heightened expectations.

Customers' respect for a brand increases when they see and like how the company responds to a problem. So if they handle it correctly, brand affinity and customer loyalty will rise. On the other hand, how a business responds to conflict or a problem tells a lot about them, so if the customer doesn't like a response, the brand could lose that customer completely. 

Poor Customer Service Can Hurt Relationships With Existing Loyalty Program Members

Lackluster customer service can even impact existing loyal customers and quickly undo all the hard work put into creating a successful loyalty program. If members encounter difficulties with customer service, they may become disgruntled and lose trust in your brand.

A study on customer service in loyalty programs by Harvard Business Law revealed that when loyalty program members encounter service failures such as shipping issues, returns, lack of inventory or product availability, etc., members actually experience more service friction and run into more conflicts when trying to get their issues resolved than non-members typically do. The study found that loyalty members who experienced a service issue "required an average of four contacts with the company before reaching a solution, and the process took 5.1 days. Non-members needed just 2.8 contacts and 3.3 days".

This study revealed that a customer's status as a loyalty program member status does not always have a positive effect when it comes to resolving customer service issues; in fact, it can be a major hindrance.

This creates a red flag for customers who put time and money into your brand and loyalty program. Such problems with customer service issues can erode the loyalty program benefits in the eyes of the customer, and lead them to question why they are choosing to participate in a program that doesn't give them the treatment they expect or support a company that isn't prioritizing their needs. 

The problem is that loyalty programs have traditionally been treated as existing within their own silo, part of a company but separate from other core departments. But this is no longer a sustainable or functional approach, especially when it comes to resolving customer service issues. 

Bridging the Gap Between Customer Service and Loyalty Programs

One of the issues in the Harvard study above was the disconnect between the loyalty program system and the customer service departments. To prevent these kinds of issues, brands must bridge the gap between customer service departments and loyalty programs. Here are a few ways to do so. 

Ensure The Customer Service Department Is Knowledgeable and Up-to-Date On The Loyalty Program

When a problem arises, the amount of time it takes to resolve it is a big deal in the eyes of the customer. When brands bounce complaints between different departments or managers, customers are less likely to return to the brand. 

Start by aligning the goals of both departments. Ensure that everyone understands that excellent service is an integral part of the loyalty experience. Encourage open communication and collaboration between customer service teams and loyalty program managers.

 The easiest way to help your customer service personnel with loyalty program inquiries is to ensure all personnel are familiar with how the loyalty program works - the process for earning and redeeming points, how redemption works, common timelines for seeing points added to their account or receiving rewards, etc.

Consider making knowledgebase materials that include common loyalty program FAQs, overview documents, or program how-to guides that personnel can keep on hand. This helps customer service teams by making them fully equipped to answer any questions. If the customer service agent can answer a question about the loyalty program, it avoids having to forward that call to another rep and delaying the problem further. 

Integrate Customer Service and Loyalty Program Technology

Another common issue is the technology disconnect between the company software systems and the loyalty platform. Companies sometimes make the mistake of keeping the loyalty program and its data separate from the other technology and systems of their other departments. 

Unfortunately, this can cause a number of customer service issues to appear: customer service reps can't identify or look up a customer by their loyalty program ID, or they aren't able to view the program member's history of earnings or redemptions, or they're prevented from being able to view a customer's loyalty program account to solve an issue, and so on.

This is why it's important when creating a loyalty program to choose a loyalty platform that can easily integrate with other software systems and technologies. It enables the loyalty program to easily send and receive data within the company, including linking customer service records with loyalty program activity. This makes it easier for making it easy for service reps to access and view loyalty program info alongside customer details when resolving issues. 

Investing in a customer loyalty platform that integrates with other technologies also ensures it can connect with multiple channels such as social media accounts, mobile apps, online chatbots, and more. These integrations allow customers to engage with your brand effortlessly, whether they're checking loyalty points, making inquiries, or sharing feedback. By meeting customers where they are, you enhance their experience and strengthen their loyalty.

Implement Self-Help and Automated Resources

Even the most well-designed loyalty programs can falter if service challenges aren't addressed. When a problem arises, the amount of time it takes to resolve it is a big deal in the eyes of the customer. When brands bounce complaints between different departments or managers, customers are less likely to return to the brand. Long wait times, unresponsive support, and unresolved issues are common pain points that can drive customers away. 

One way to mitigate these issues is by automating routine inquiries and providing self-help resources. This can reduce the burden on your support team while still delivering timely assistance. This allows your human agents to focus on more complex issues, ensuring that customers receive the attention they deserve.

Eliminate Inconsistent or Conflicting Information

Consistency is the backbone of successful customer interactions. Whether a customer contacts your brand via phone, email, chat, or social media, they should receive the same high-quality experience. Inconsistencies can create confusion and frustration, eroding trust and loyalty.

Implementing a unified communication strategy ensures that all service channels provide accurate and consistent information. This consistency extends to loyalty program information and member benefits as well. Ensure that details like program member benefits, rewards, and offers are communicated clearly across all platforms, preventing misunderstandings and disappointment.

Utilize Customer Feedback & Review Processes

Feedback is a goldmine of insights that can help refine both service and loyalty strategies. When customer service teams receive feedback from loyalty members, they can address concerns promptly, strengthening customer trust. 

Provide feedback loops and encourage customers to provide feedback on their experiences, whether positive or negative. Implement customer surveys and follow-up communications to gauge customer satisfaction. You can utilize your loyalty program to reward these interactions with points, which encourages customers to engage with service channels.

Analyze the feedback you receive to identify trends and areas for improvement, and then use those insights to fine-tune your loyalty program offerings and enhance service interactions

The Future of Customer-Centric Loyalty

In the battle for customer loyalty, exceptional customer service is your greatest ally. When you align your customer service initiatives with your loyalty program, you create a powerful synergy that enhances customer experiences and drives long-term commitment. Remember that every interaction matters and the way you treat your customers can determine the success of your loyalty efforts.  By placing customer service at the heart of your loyalty strategy, you position your brand for long-term success.

Want more details on how this one change could boost your loyalty program? Reach out to us and help us help you!