Tuesday, April 01, 2008

Rewards or Recognition- Is There a Choice?

We have been trained to think of loyalty programmes in tiers - silver, gold, platinum, etc. We always think of giving monetary rewards at the bottom-rung, and give privileges (recognition) as and when the customer climbs these tiers. The higher the tier, the higher the rewards and privileges.

This seems fine, till we start looking at the recipient of these rewards and recognition closely. Let's take an example - telecom. Here, the high users may be a mixed bag - he could be a businessman, a travelling salesman, a CEO, an insurance agent, a stationery supplier, a college student, or she could be a housewife - in short, just about everyone.

And the rewards one is likely to earn on their telecom bill is unlikely to be much (after all, 2-3% of a monthly bill of Rs.500 or more doesn't amount to much).

Now, some of these customers might already be on numerous loyalty programmes, while the others may be on none. Some of these customers might be on pre-paid, while the others might be on post-paid. Their social standings vary. Their self-image varies. Some of these customers might be monetary benefit-driven, while the others may be convenience-driven. In short, they are as diverse in their thinking or expectation as chalk and cheese. And mostly, the telecom companies do not have such detailed profile information to segregate these customers.

Another industry - Airlines. Here, mostly there will not be an aberration in the kind of people who fly some, and the kind of people who fly more. But then, there could be situations - like the on-board couriers in courier companies might fly more than their CEO. Now, the airline in its wisdom is giving gold or platinum benefits to the on-board courier, while the CEO might be languishing in their silver, or even worse, their red/blue rung.

And whether we are talking rewards, or talking recognition/privileges, both cost the marketer some monies (either you are parting with some percentage your earnings, or buying some privileges from other brands/marketers).

So, why do we as marketers insist on giving everything to everyone - just because he's climbed the tiers? Why don't we give the option to the customer to choose either the rewards or recognition (while there can be tiers even in these)? Why don't we let him decide what he would prefer and hence save some monies, by giving him what he's himself opted for? Why, for heaven's sake, we don't give him a chance to feel a little more involved (because, if I choose something, I have taken an involved/conscious call on what benefits I would like)?

It's time we as marketers started to consider this, because that's what true CEM (Customer Equity Management) is all about.