In today’s business environment, we frequently discuss engagement coupled with loyalty. We study whether our staff is engaged and assess the economic 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 these individuals, especially in a very competitive environment. And while this discussion will focus on new methods to meet these objectives, 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 some loyalty measure being applied. And these loyalty measures, while highly prominent today, really started about 70 years ago with Gold Bond Stamps and S&H Green Stamps. Businesses gave out these “stamps” to consumers to create higher levels of loyalty to their store or product. In a recent discussion, I heard of a person’s mother who would go out of her way to a grocery store in a different neighborhood because she got Green Stamps. Today, loyalty points are everywhere, points for the use of credit cards, for flying an airline, for overnight stays, for reduced gas prices at a particular grocery store and the list goes on. Loyalty points are sometimes now even substituted for good service. During a recent poor hotel experience, the result was not a reduction in the bill but an allocation of additional loyalty points to placate me. Receiving additional loyalty points for simple or extensive inconveniences that were, in essence, poor service delivery is common today. Sadly, a lack of quality is now often equated to point “reimbursement.” While it is possibly a questionable long-term strategy, the key here is that in the B-to-C environment, loyalty is “bought” by point accumulation. If you have a specific hotel organization’s points, are you going to change your loyalty because of a bad experience when high point levels get you free experiences? The consumer has been fully indoctrinated into rewards for product use and the accumulation of these awards. It has become the paradigm of consumerism. By now, you may be asking yourself how this relates to changing the employment relationship. The simple answer is that it’s time to change the B-to-B employment relationship to a B-to-C association. The paradigm noted of today’s customer includes what our employees expect as consumers and how this drives loyalty. Today’s highly competitive environment for employees, the cost of turnover and the returning expectation of quality of the buyer demands a rethinking of this relationship, especially for the low-wage staff member; but this can apply on a larger scale. However, in the short term, the minimum-wage earner needs to see a change in the value proposition of the employee-employer association. Early on in my career, I listened to the president of a company speak at a general managers’ meeting. The comment from that meeting that I still remember is, “Guest relations mirror employee relations.” 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 being the internal customer with the results projected to be the same; take care of the internal customer, and they will take care of the external customer. Sadly, I believe we’re fully embracing these perspectives, but it can be remedied. Let’s look at the internal customer. As noted earlier, businesses are striving for an engaged staff member who demonstrates loyalty to the organization. This is the same thing we are hoping to achieve with consumers (external customers). Therefore, the new addition to help amplify the employee relationship is the introduction of a loyalty points system. Many businesses expect that as long as the staff is being paid, all else should just follow. We additionally recognize that the work environment, communication, leadership, fair treatment and the like contribute to strengthening this relationship, but more can be done. Under a broad title, the approach I am suggesting can well be identified as “gamifying” 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 over certain time periods. Competition and rewards, attendance points, customer mention points, exceeding performance points, shift pick-up points, and so forth—the key is to align performance with specific rewards that can be converted to something of value to the individual. If you have a credit card and are accumulating points, you can convert those points into hard cash or discount cards for stores or products you are interested in. The same should be true for performance points. With these performance points, an organization can recognize staff in real-time for actions they are taking or services they are delivering. The other advantage of this approach is that if an employee has accumulated points and is approaching the next reward level, they may well think twice before jumping to another company. Publishing data for individuals who are willing to show results can also act to motivate performance as we see in many game-oriented environments. This approach’s additional costs will be offset by reduced turnover, improved customer experience, reduced credits or rework and fully bringing the concept of internal and external customers in line with each other. With the addition of loyalty points to already in place staff engagement efforts, it will be crystal clear to employees that the organization values their relationship at the same level as the customer relationship. And this alignment will result in both top and bottom-line growth and overall value creation. Originally Published in Forbes