Rethinking Rewards Cards

A friend of mine, who happens to an ex-service manager, sent me a cute cartoon the other day. There are two guys trying to pull a big wheelbarrow that was filled with parts and had square wheels on it. The salesman comes in with two round wheels and says, “Hey, can I show you something?” They both turn to the salesman and say, “Can’t you see how busy we are? Come back another time.” For some odd reason, this reminded me of how hard it has been for service departments to see the benefits of a rewards card for the service drive.

Frederick Reichheld documented in his book Quality Comes to Service, the following, “a company’s most loyal customers are also its most profitable. With each additional year of a relationship, the customer becomes less costly to serve. Over time, as the loyalty cycle plays out, loyal customers even become business builders: buying more, paying premium prices and bringing in new customers through referrals.”

Many managers think rewards programs are cheap promotional tricks, short-term fads or just a big giveaway. If you’re looking at your rewards program as a cost rather than a profit center, you’re doing it wrong. A loyalty program has to be a managed strategy. You must motivate the customer to engage in the rewards program.

Some stores have factory programs that are mandated to be given to each customer. This is better than nothing but not much. You can have all of the support the factory can give you, but if you’re not engaged why should your customer be?

Many don’t remember, but the first rewards program was S&H Green Stamps, which started back in the late 1800s. The stamps could be collected into booklets, which could then be redeemed for rewards ordered from S&H catalogs.

These days, rewards programs are so universally accepted that you rarely find any major business that does not offer some form of compensation back to their customer to try and retain their business.

The problem in most businesses when it comes to offering a rewards program centers on the fact that they are only as good as the design of the program. Have you ever gone into a store and the clerk said, “Just take this receipt home and enter it online to receive your reward”? Or how about, “We mail you coupons based on how much you spend” or “I’m sorry your points will expire in 30 days if you don’t use them”? Keep in mind when you’re designing your program, the more you can engage the customer, the more effective the retention will be.

When we are looking to create a rewards program for the service drive there are a few things we should keep in mind. First and foremost, there is nothing wrong with failure. I won’t get into the famous Teddy Roosevelt quote, but often we resist starting something because if it doesn’t work, we’ll get in trouble. It’s better to just keep doing things the same old way and keep the boat rocking to a minimum.

Starting a great branding program or loyalty program for your service department won’t necessarily be a walk in the park. There will be mistakes and starts and stops. However, if you make this message the central part of how you are doing your business going forward, gradually the rewards will start compounding.

Secondly, make sure you put a process in place so your message is going out the same way, every time to every customer. Have your program integrated to keep the customer engaged. The customer rewards card should tie into a customer website, which ties into a customer app, which ties into all of your digital marketing. You’re not only creating a loyal customer but you have branded yourself as someone who cares about their needs and their business.

I know we are all busy with our daily duties, but like the two guys with the square wheels, there are better ways to grow our business then the old “treat them right and they will come back” approach. Rewards cards are the best way to lay a foundation to grow your business year after year. They can enhance your service drive and create customers for life.

Instead of looking at rewards cards as just more work, put yourself in the customer’s shoes. Get creative, drive more business, the sky is the limit if you become as engaged in the program as you want your customer to be.