Loyalty Programs and Customer Feedback

Incentivizing consumer feedback can be an effective way to ensure more thoughtful and detailed reporting, as well as re-affirming to customers how helpful their comments are to the integrity and quality of your business.

As with any case of freebies, however, careful consideration must be given to the costs and benefits of this practice to ensure that it’s not just money down the drain that could potentially be better-spent elsewhere. As we’ve learned, however, it costs around 3x more to acquire a new customer than it does to maintain an existing customer. While individual businesses should examine if this option is right for them and their main consumer demographic, freebies can be an extremely effective tool to not only ensure quality reporting, but also to increase brand loyalty and relationships directly with consumers. In this way, those participating in the loyalty programs feel as though they have an elevated status and stake in the business, and this can feel like an even more satisfying, non-monetary reimbursement for their feedback.

An effective strategy for determining if the cost of the freebie is worth the benefit of a consumer review, is to consider the cost of reporting feedback to the consumer themselves. Since many customer feedback platforms aren’t incentivized, it appears that many consumers would voluntarily submit feedback for a business, even without the promise of a free lunch or monetary reimbursement. Elevating the responsibility of the reporting customer, for instance, by making the comment form longer and more exhaustive, is an effective idea because it both increases reported helpful information to the business, while, essentially, allowing the customer to “work” for their reward.

This access to additional information, the promise of greater influence than a regular consumer, and tangible incentive still serves the purpose of allowing the customer to be part of an inner circle and cultivate their loyalty, while still increasing benefits to your business beyond just another comment card in the feedback pile. Again, it is likely that a consumer who is part of a specialized feedback program would be even more motivated to leave a thoughtful and detailed report because of this feeling of responsibility and reward--this relationship should be cultivated and is incredibly mutually beneficial.

Another reason to closely examine any freebie promotion is the threat of, well, those who are only in it for the freebie. While many folks would gladly spend the time it takes to fill out a detailed feedback report, the intentions of others may not be so pure. To avoid ending up with a bunch of comment cards bearing smiley faces or unintelligible strings of letters and numbers, the elevated/inner-circle idea again appears more desirable as an option for loyalty and feedback programs.

The qualifications are up to you--perhaps it’s the top percentage of frequent patrons, for instance, who are given the opportunity to enlist in a semi-regular feedback loyalty program and receive occasional freebies or incentives in return.