Customer Feedback Fuels Loyalty Program Success: Expert Advice for Brands

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Brands building the best relationships with their customers and loyalty program members are those that proactively seek to learn how customers and members feel, their perspectives of the brand, what their expectations are, and if there are any pain points in the brand-customer/member relationship. This goes for brands newly entering the customer loyalty landscape with first program launches as well as those that are rolling out loyalty program design changes or scaling back options previously available without fully understanding customers’ expectations or sentiments — which can result in disaster, no matter the intention.  

Of course, new program launches or planned program changes are not the only time to seek customer feedback. It should be an ongoing process, evolving alongside customer expectations as new trends emerge and increasingly advanced technologies improve feedback solicitation, collection, and analysis while driving brand strategies and brand-customer interactions.   

Loyalty360 spoke with supplier members and loyalty strategy experts about leveraging the right tools for gathering customer feedback, integrating it into loyalty programs and the decision-making process, and addressing negative feedback and customer dissatisfaction. 

  

Article contributors:  

  • Cassie Preston, Director Customer Engagement and Strategy, Baesman 

  • Jim Clarke, Consulting/Strategy, Capillary Technologies  

  • Marlena Półrola, Pre Sales Consultant, Comarch 

  • Eir Welch, Director, Customer Success, Kobie 

 

Qualitative and Quantitative Feedback — Leveraging the Right Tools and Methodologies 

When collecting customer and program member feedback, brands can choose from a range of tools, technologies, and methodologies to gain the necessary insights for strengthening customer loyalty and rewards programs. Depending on the resources available, the goals behind collecting and understanding the feedback, and the right approach for the organization, brands may leverage surveys, polls, CRM analytics, internal resources — e.g., customer service team members — and other tools to develop customer loyalty success strategies. The experts featured in this article included surveys as a mechanism for gathering feedback but offered a deeper look into what brands might consider employing.      

Surveys and questionnaires are useful for collecting qualitative feedback from loyalty members. By providing a direct channel for expressing preferences and suggestions, they also foster a sense of member involvement in the program. Comarch’s Półrola notes that, from a company perspective, by collecting data from customers (feedback on program features, desired rewards, preferences, etc.), businesses can dynamically update customer attributes. This data can then be leveraged to create more personalized and targeted loyalty campaigns, with tailored promotions and incentives to individual preferences, thereby enhancing customer engagement and satisfaction.  

Quantitative feedback within a loyalty program plays a vital role in assessing its efficacy and tailoring strategies for enhanced customer engagement. Businesses operating loyalty programs may focus on metrics such as redemption rates, customer acquisition and retention costs, and the overall lifetime value of loyalty members.  

“For example, a retail loyalty program might closely monitor the frequency of customer purchases, average transaction values, and the success of targeted promotions,” Półrola further explains. “On the other hand, a travel-related loyalty program might prioritize metrics like points redemption for specific rewards, customer churn rates, and the impact of loyalty initiatives on overall revenue.” 

Customer surveys in exchange for branded gift cards are the most frequent method of feedback collection Baesman’s Preston sees in the industry. While there is some subjectiveness when asking the biggest brand advocates questions about the brand, surveying is often an effective method to better understand the story behind awareness, acquisition, engagement, and retention trends seen in the program. She also points out that customer feedback can take the form of escalated calls to the call center or poor experiences in-store.   

“The most effective way to get a comprehensive quantitative view of the customer loyalty program and its impact on customer behavior is by adopting an all-of-the-above approach that combines traditional quantitative feedback techniques such as periodic surveys with insights delivered through customer analytics and loyalty program platforms,” says Capillary Technologies’ Clarke.  

Clarke believes that qualitative feedback rounds out the view of the member and the loyalty program. Beyond traditional techniques like focus groups, qualitative feedback can be sourced through technology-assisted monitoring of customer interactions with customer service agents — human or digital — and leveraging tools such as in-app mechanisms to capture real-time customer feedback, embedding these at every moment of truth in their loyalty program interactions. 

Kobie’s Welch emphasizes that brands must take a 360-degree approach. While social media and email surveys are great platforms for gathering feedback, it’s important to understand that this only represents customers who are active in those spaces or who had a one-off experience.  

“By the time a customer is on social media, it’s often too late to address their concerns,” says Welch. “One of the best places to get feedback is from your front-line team, specifically your Customer Service Representatives. They are your ‘canaries in a coal mine’ and can identify issues much faster. They can also pinpoint minor friction points in the customer experience.” 

 

The Role of Technology 

Unsurprisingly, the experts featured in this article agree: technology plays a significant role in a brand’s customer feedback management efforts, encompassing collection, analytics, strategy formation, and action/execution.    

Some brands prefer an evergreen approach to collecting feedback that is embedded in their current member experiences. Baesman has seen significant interest develop around preference centers that plug into the online account management experience for programs, enabling members to tell brands what channels they prefer, what products they seek, and what types of marketing they want to receive.  

“This can be a helpful tool, but often expensive to design and build,” says Preston, noting that many brands also leverage their existing channels to send out survey questions. “As loyalty evolves, some brands have invested in giving members the option to get early access to a product and review that product for points or some other benefit in return. No matter what a brand’s sophistication level is in collecting feedback from members, it’s a necessary piece of the data puzzle.”    

Welch and Półrola see the role of technology in a brand’s customer feedback management and loyalty efforts as crucial.  

“Technology can help log the customer’s actual verbatim feedback onto a platform where their data already exists, enabling you to personalize their offers,” says Welch. “This allows you to meet the customer where they are on a more genuine level.”  

“Tech tools help collect feedback from customers — whether it’s a quick survey, a chatbot, or a review platform,” adds Półrola. “This makes it easier for customers to share their thoughts. But the real magic happens when tech turns that feedback into something useful. It crunches the numbers, spots trends, and figures out what customers really love or want to be improved.”  

Półrola contends this information isn’t just for show; it’s the secret sauce for creating personalized experiences and loyalty perks. Beyond retrospective analysis, AI’s predictive capabilities enable brands to anticipate customer preferences and evolving needs.  

“It’s the tech-driven glue that binds brands and customers in a long-lasting, happy relationship,” she finishes. 

Clarke affirms that technology enables the process of gathering, assessing, and then acting on member feedback. Technology underlies everything, including:  

  • Executing member digital surveys  

  • Generating indirect feedback gleaned through behavioral analytics when a business intelligence platform is utilized  

 

Integrating Customer Feedback into Loyalty Programs and the Decision-making Process  

Gathering customer feedback is only a part of the work necessary for developing, launching, maintaining, and eventually evolving a customer loyalty program that is perceived as valuable by customers/program members. The insights collected must be fully understood and then integrated into the decision-making process. 

Brands can effectively integrate customer feedback into their loyalty program and decision-making process by adopting a comprehensive approach. This involves seeking input from customers through traditional methods such as surveys and social media as well as collecting feedback provided directly to front-line agents by customers. Welch believes this approach allows brands to gain valuable insights into customer needs and preferences, as well as identify patterns and trends that may have otherwise been missed.  

“During the pandemic, we found that customers were seeking a connection and support from brands,” says Welch. “By relaunching our soft skills training as ‘emotional connection’ training, we were able to foster the support customers needed. This led to an increase in customer satisfaction ratings, as they felt heard, understood, and supported.”  

Ultimately, by prioritizing customer feedback and incorporating it into their decision-making processes, brands can build trust with their customers and provide them with the exceptional service they deserve. 

According to Clarke, it is imperative to first establish the sources and methods for collecting, managing, and processing customer feedback on the loyalty program. Channels to collect the information include surveys, in-app feedback tools, and customer service monitoring methodologies, among others.  

Furthermore, Clarke sees gathering insights into customers’ emotional connection to a brand as important to understanding customer behavior and motivation, as purchase decisions and brand loyalty are often driven more by emotional factors than purely rational considerations.  

“Feedback from reward program customers can be encouraged by offering, for example, bonus points for providing it,” shares Clarke. “The information sourced through these channels can then be consumed by data analytics tools, assisting program managers with identifying patterns and trends, exposing opportunities, and generating a consideration set of customer-driven ‘you asked, we listened’ options that can be actioned around program evolution and improvement.” 

Preston advises brands to collect feedback from both prospective and existing members about potential program changes. Frequently, Baesman observes that survey data validates what is seen within the behavioral data that showcases shopping and spending behaviors.  

“Every now and then, customer feedback can help clarify loyalty program design decisions and ensure that customer hurdles are removed before any changes are introduced,” adds Preston.    

 

Addressing Negative Feedback and Customer Dissatisfaction 

Before being able to address a dissatisfied customer, Clarke believes the brand needs to know the negative experience exists in the first place — this is why establishing channels and underlying technology to gather, process, and synthesize customer feedback is so imperative. With the “inbound” feedback channels operationalized, the brand should have established policies and procedures in place to address customer feedback — good or bad — ensuring a prompt, solution-oriented response that, in the case of a customer with negative feedback, maximizes the chance that the customer is retained — and perhaps even turns the customer into a brand advocate.   

“Brands today have much more data on the individual customer, particularly if that customer is a member of the brand’s loyalty program,” says Clarke. “This data can be leveraged more directly, addressing negative feedback and allowing for a much more personalized response, which goes a long way toward not only assuaging the customer’s concerns in the moment but fostering brand loyalty in the long run.” 

For Półrola, while compensations like points or discounts can offer quick fixes, authentic customer connection transcends transactional gestures. Establishing a real bond requires understanding customers, empathizing with their emotions, and engaging in meaningful communication. Instant dialogue after receiving negative feedback becomes pivotal, fostering understanding and paving the way for a more profound and lasting connection. To achieve this, brands must have event-based communication strategies in place, ensuring that immediate responses are triggered upon the receipt of negative feedback. This real-time engagement demonstrates the brand’s attentiveness and commitment to addressing customer concerns swiftly. Turning a negative customer experience into a positive one requires proactive communication, empathetic understanding, and swift resolution.  

“Customer dissatisfaction is a major concern for brands as it leads to customer churn,” says Welch. “To prevent this, it’s important for brands to address negative feedback and concerns immediately and effectively.”  

One approach is to have a dedicated team that reviews feedback from detractors and analyzes customer profiles in the company’s CRM system. If there is a trend, the issue is escalated to the relevant department for resolution. It’s worth noting that customer satisfaction issues may not always be related to technology but can stem from other factors such as packaging or interactive voice response (IVR) prompts. Welch reminds brands that to foster customer loyalty, it’s important to build a relationship with a genuine emotional connection that cultivates trust.  

While it can be challenging to know if negative feedback reflects the voice of some or many customers, Preston believes if brands find a theme throughout the feedback loop, it’s good to address that by looking at the full data picture.  

“Is the customer having challenges with your customer care center? Struggling to redeem rewards online?” asks Preston.  

She directs brands to investigate expressed issues to determine the root of the problem and learn how it’s influencing the health metrics of the program. Each unique customer challenge may be easily solved through quick program enhancements, appeasement programs, or a simple acknowledgment of the issue with plans to resolve.   

 

Challenges in Managing Customer Feedback — Expert Observations 

Loyalty360 asked its supplier-member experts about the challenges they’ve encountered — or that their clients have encountered — in managing customer feedback effectively. What recommendations would they give on how to overcome them? 

One of the initial challenges Kobie faced was placing too much emphasis on sentiment. Welch explains, “Focusing too much on the sentiment of the customer can lead to getting lost in the variety of reasons a customer would be upset. However, when we shifted our focus to identifying the root cause of trends, we were able to gain a better understanding of the context. This allowed us to delve deeper into the specific topics and get a clearer picture of what was happening and how customers felt about it.” 

Baesman experienced a similar phenomenon, finding that often, member feedback was either taken too lightly or too heavily. Preston cautions that it’s important to put the right amount of weight on the feedback based on the methodology of the research being conducted and the way the feedback is being collected.  

“The full story gets weaved together not just with customer feedback but also from a thorough analysis of customer behavior,” says Preston. “We often find that self-reported shopping habits, for example, are different than what we see within the data. Validation is necessary to be sure the feedback received should be actioned upon.”   

One of Comarch’s clients encountered a significant challenge in managing the sheer volume and diversity of customer feedback pouring in from various channels. The multitude of feedback, ranging from social media comments to surveys and customer support interactions, overwhelmed the client’s existing system. To address this, the retail brand implemented advanced feedback management tools that incorporated automated tools for categorization and sentiment analysis.  

“This not only allowed them to organize the vast amount of feedback but also prioritized responses based on urgency,” explains Półrola. “By leveraging analytics, they identified key areas of concern and focused resources on addressing issues that had the most significant impact on customer satisfaction. The system’s automated alerts allowed them to address urgent matters in real time, demonstrating a commitment to proactive customer engagement.”  

“The primary challenge is getting the first step in building a feedback management process right,” asserts Clarke. “A brand must correctly establish feedback channels and institute the rigor and discipline around the procedures for collecting, managing, synthesizing, and acting upon the feedback received.”  

Clarke maintains that without a well-designed feedback system — including the technology and processes (e.g., surveys enabling its collection, dissemination, and consumption), plus the business processes of what to do with the information once received — everything that can or should occur downstream based on the feedback is compromised.  

In the end, a well-designed process ensures that the feedback reaches those responsible for acting upon it, whether that’s addressing the specific customer’s issue at hand or incorporating the feedback into the process that generates management insights, which, in turn, lead to identifying opportunities for product, service, or program enhancements.  

 

Establishing a Voice of Customer (VoC)/Customer Feedback Process — Recommendations for Brands 

Before anything else, brands need to be explicitly clear in answering the question, what exactly is it they are looking to accomplish by establishing a VoC/customer feedback process? In its simplest form, the process could be developed specifically to handle dissatisfied customers and nothing more, though most successful organizations have evolved beyond this narrow approach. Clarke proposes that, alternatively, the brand could take a more sophisticated path that reframes feedback as an asset that can be leveraged in the brand’s continuous improvement efforts.  

“Specific KPIs should be developed that answer the question ‘what does success look like?’ for the process’ objectives and to facilitate ongoing measurement,” says Clarke. “The brand should recognize that upping its game for feedback management, while building a better customer relationship and fostering loyalty, also brings a higher level of investment in to execute.”  

Kobie advises brands to take a 360-degree approach — not solely CSAT — to gain a deeper understanding of customers. This is accomplished by identifying and compiling trends and determining key opportunities to reduce customer friction and improve the experience. While surveys and social media data are standard, Welch points out it’s also helpful to add feedback provided directly by front-line agents.  

“One way to start is by initiating roundtable conversations with agents and asking them a series of relevant questions,” shares Welch. “Another approach can be to add dispositions to the end of calls. Speech analytics is another great option we leverage to analyze the emotional character of the call, which can help improve the customer experience and save money in the process.” 

Brands must absolutely understand their goals for collecting customer feedback. For example, is the purpose to improve the loyalty program? Increase the ability to personalize member communications and promotions? Is it to understand the experience from the customer’s viewpoint better? Or is it all of the above?  

“Once you have your goals established,” begins Preston, “work with a research partner to remove any bias from your lines of questioning or a tech partner who is well established at creating experiences that result in feedback collection. Leverage the feedback process, along with what the behavioral data of customers has revealed to create a full picture of what the customer experiences from your brand and your program.”  

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