Verizon Rewards Its Loyal Customers


For most brands, loyal customers are the be-all and end-all. But marketers at telecommunications giant Verizon say that even with a recognizable brand, customer loyalty is not a given.

“Loyalty is extremely important because it generates all of your future revenue and reduces costs; the more loyal your customers are the less that you have to spend,” says Andrew Herz, director of customer relationship management at Verizon Wireless. “Over the years Verizon has done a great job on building a brand that sits on functional loyalty.”

Herz defines functional loyalty as devotion from customers rooted in good products and services, but with no emotional ties. “With functional loyalty, customers buy something because it works,” Herz says. “For example, they may say that Verizon has the best network or multiple store locations. So, there’s a lot of good functional loyalty in our base. We’ve got the best functional loyalty in the industry.”

But, Herz says, marketers at Verizon wanted to move past function and tap into customer zeal. They wanted to enhance emotional ties with customers. “Rewards. They create more of an emotional tie to the company. And we’re looking to enhance [those relationships] with a rewards program,” Herz explains.

So, last July the team at Verizon Wireless launched the Smart Rewards Program. The goal, Herz says, was to create something more poignant and exciting for customers that, ultimately, increased revenue, decreased acquisition costs, and increased customer retention at Verizon. “Rewards get us to a point where customers want to do business with us because they feel like they have a stronger relationship with Verizon; and it’s because of the things that we’re providing them,” he says.

Through Smart Rewards, loyalty marketers at Verizon aimed to have a personal influence on customers by making an impact on their everyday activities and interactions. The team at the telecommunications provider doled out deep discounts on local shopping and dining spots, merchandise from more than 200 brands, Verizon gift cards, and even opportunities to win tickets to NFL games.

Herz says that customers simply had to enroll in the program and are then rewarded for actions that they most likely would do anyway, such as signing up for automated payments or choosing paperless billing. “We’ve provided them benefits they’ve never had. In doing that, we’ve managed to get customers to engage more,” he says. “This rewards program drives excitement and engagement.” 

Customers have been diving right in. Verizon Wireless has rewarded consumers with more than 600,000 Verizon gift cards, 500 free tablets, and thousands of gift cards to stores, restaurants, and hotels.

And Smart Rewards, Herz says, is a win-win for customers and Verizon. “We’re seeing really great results,” he says. “We’re seeing incremental cost reductions, and we’re seeing a pretty significant jump in loyalty for customers who are in the program.”

As for the future, Herz says that Smart Rewards is definitely in Verizon’s marketing plans: “These successful results always help getting executives behind the program. And we see this as an important platform to boost loyalty in 2015 and beyond.”

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