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Loyalty Program: Punishment or Reward?

Loyal Customers Need To Get The Value They’ve Earned!

When you run a home services business, keeping your customers happy is essential. A well-run loyalty program is one of your most powerful tools because, by design, it fosters long-lasting relationships. 

But, a loyalty program that is run poorly can drive customers away!

Here are the most important things to remember about a loyalty program.

A decorative image showing a person looking up at a Loyalty Program card.

Key Takeaways For A Successful Loyalty Program:

  • Deliver Real Value: Loyalty programs should be more treat than trick. Ensure rewards are worth it and that they don’t diminish over time.
  • Transparent Communication: Be crystal clear about program terms. Hidden charges or misleading promises lead to unhappy customers.
  • Customer-Centric Approach: Put yourself in your customers’ shoes. What would make you feel appreciated and valued?


Loyalty Should Have Its Privileges

Loyalty programs benefit your company – they give you many chances to impress your clients, earn their trust, and boost your revenue. But are they worth it for your client? Your program members need to recognize the benefits of membership

“The golden rule for loyalty programs is value,” says Bob Misita, CEO and Co-Founder of LeadsNearby. “If it feels like a bait-and-switch, customers won’t stick around.”

There is an easy way to see if your loyalty program passes the value test:

✓ Does it end up costing more for members than non-members?
✓ Do members lose benefits if they miss a service?
✓ Are promised benefits like priority service actually delivered?

If you can’t answer yes to all three of these questions, then you might be unintentionally punishing your loyal customers.


The Perils of Poorly Executed Programs

Bob knows from personal experience that some incentives can have the complete opposite effect. 

“I won’t name the company here, but I used to buy my computer monitors exclusively from one company,” Bob remembers. “One time, it came with a $20 gift card, which I thought was nice.” 

Bob says that, unfortunately, the card got lost in a drawer for about a year, but he was excited all over again when he found it. “I wanted to reward a team member for a job well done, and when I found the card I knew that it was the perfect way to do it… or so I thought!”

With the expiration date on the card still years away, he proudly left it on the employee’s desk.

What Bob didn’t know was, while in the drawer, the $20 gift card slowly dwindled to $0 from hidden monthly fees. This change in amount was discovered when the employee went to use the card – and it was declined.

“That’s a loyalty program turning a reward into a punishment!” 

Bob points out that he has looked elsewhere for monitors ever since. ”It’s not because they’re poor monitors, either. I just didn’t want to buy from a company that would run a bait-and-switch on a loyal customer.


Build Bridges – Don’t Burn Them

“It takes so much time and effort to reach new clients,” offers Mark Sherwin, President and Co-Founder of LeadsNearby, ”And it’s not cheap.”

Mark says that once you have a relationship with a customer, you need to do everything in your power to maintain and grow it. “This is when you start reaping the rewards of all the money you spent to acquire that customer! Don’t lose sight of that.”

Whether you are an HVAC company, plumber, electrician or a home services provider of any kind, if you treat your loyal customers like the precious gift they are, they’ll stick around.

Keys to establishing and running a successful loyalty program.

Loyalty Is A Two Way Street

A loyalty program should be a win-win, and it will be when you deliver clear communication and genuine benefits. As our chef executive and expert marketer, Bob, likes to say, “Trust is earned when actions meet words.”

Your loyalty program can make or break customer relationships. The power lies in offering real value while keeping it fair. 

It’s about being the brand customers trust and return to—not because they’re trapped, but because they want to.

Call 919-758-8420 for a free, 25-minute consultation about your marketing strategy – or contact us online . LeadsNearby is the partner that home services contractors turn to when they’re looking to grow their business. We can do the same for you.

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