A loyalty program is known for increasing loyalty to a brand and its customers. Over time, they have also been perceived as a way of rewarding yourself for purchases made. But now, many members are taking the opportunity to use the programs to reward staff within their business.
During an around-the-table workshop, many loyalty program members explained they use the rewards earned from the schemes for their staff to show their appreciation for their hard work and commitment – particularly around the Christmas period. Executive Chef at the Novotel in Darling Harbour, Leigh Roberson said he began using this technique because he found it motivates his staff during the year.
Chef Leigh has been a member of a number of food distributor’s loyalty programs over a number of years. “We use the rewards as staff Christmas presents every year,” he said. “We buy whatever we can with the earned points and put it all in the room for staff. It’s like Secret Santa but no one has to buy anything. The staff love it.”
Chef Leigh said he found this approach important for his staff around Christmas because many are separated from family and friends due to unsociable long hours and high-pressures due to the nature of the hospitality industry. Fellow chef, Erin Martin backed his strategy, explaining she still uses rewards that were gifted to her by her former boss, thanks to his involvement in a loyalty program.
“I still have a BBQ that I received from the loyalty program, as well as a washing machine and a pair of chicken sheers,” she said. “I also have a pair of scissors that my old executive chef handed me 10 years ago. That is something I was rewarded with and I still use to this day,” she continued. But while physical rewards from a loyalty program seem to be a big hit with staff around the festive season, there has been a divide when it comes to gift cards.
Responses from our workshop showed a divide between the two items, with some preferring physical rewards over gift cards, and others favouring the gift cards. Chef Erin explained she doesn’t like to be rewarded or reward her staff with a gift card because it doesn’t show a personal connection.
“I don’t like the vouchers because if I get them, the partner gets them…I like to get a gift that I could use myself,” she explained. Sitting on the fence, chef Leigh admitted while he likes to reward his staff with physical gifts, he thinks gift cards are also beneficial to incentivise staff. “If you give your staff a $90 card it may not seem like a lot but for that person, it could mean a weeks’ worth of shopping or a party worth of alcohol,” he said.
Over the last 12 months in two of the major loyalty programs across two different industries, there has been a shift in claiming between gift cards and physical rewards. Across the two programs, gift cards and physical rewards were the top claimed products, with many members choosing physical rewards over the cards. This shift towards physical rewards has been classed as a positive for loyalty program stakeholders, as they provide a true connection between the program and member, whereas gift cards provide a sense of convenience.
The downfall with gift cards is that they eliminate the connection and memorable feeling between the loyalty program and the member. This disconnection is because gift cards are commonly used to make home purchases, such as groceries and to pay bills or petrol. They don’t provide the same long-term memory or connection as a physical gift does, which can be used endlessly over time. An example of this is a set of knives, kitchen appliances, etc.
When planning and executing your loyalty program, ensure you review the data provided to you during the claiming periods. This is important because something you think may be working, could in fact not be. It also allows you to gain knowledge of your member’s activities and their needs and desires. By developing this knowledge, you can make an alteration to your loyalty program moving forward to encourage engagement between the scheme and the member.