When it comes to choosing an astrological sign, a firm might wish to incorporate Virgo meticulousness or Piscean effervescence. But Verizon has found that a series of Gemini awards – those that incorporate both business functionality and personal appeal – generated a 21% retention rate lift over a simple credit-based rewards program, and a 10 percentage point increase over a functional business awards scheme, said Mary Pociask, a senior marketing manager at the telecommunications firm.
The rewards are part of Verizon’s Business Link program, a corporate-focused loyalty effort that has survived seven years, two mergers, and a variety of managers. In addition to its churn reduction, another secret for its success is a lift in spending rates that have, at times, racked up sales 31% higher than those from a control group. The campaign’s details were presented during a session at the Direct Marketing Association’s Direct Marketing to Business Conference in Orlando, FL.
Gemini awards, as defined by Kelly Hlavinika, loyalty marketing practice leader of Frequency Marketing Inc, are those that appeal both to the operational side of a business as well as acknowledging that corporate employees need to have their human side tended to as well. Rather than offer traditional B-to-B loyalty program incentives, such as dollars off merchandise or seminars, Gemini rewards combine ego gratification and personal recognition with legitimate business reasons.
For Verizon, this meant setting up a series of rewards for the 2 million small- and medium-sized business customers it gained as its predecessor companies, Bell Atlantic, Nynex and GTE, went through a frenzy of merging during the past seven years.
The Business Link Rewards program rewards firms that spend more than $125 per month on a 12-month basis for local and regional calls, with additional bonuses available for purchasing Verizon or IBM products, or using Airborne Express shipping services. The program was flexible enough to initially allow customers with minimum use levels to join up. As deregulated geographic areas matured, Verizon was able to target the customers it wanted to invite to join.
Hlavanka noted that marketing campaigns’ financial results improve by between 10 and 30 percentage points when they use valid contact names. This is a lesson Business Link Rewards has taken to heart: The program relies on accurate corporate contact information when mating its pitch: Solicitations are sent to the business owner, telecommunications manager or, in a few instances, other decision-making business executives.
Verizon uses quarterly statements, which are separate from monthly invoices, to reinforce the points earned and the program’s benefits. The decision to split the statement from the invoice was quite conscious: Often the executive enrolling the company in the program is not the same one handling accounts payable.
Each statement includes new redemption opportunities, as well as variable copy blocks that allow statement content to be as relevant as possible to the customer. The program has evolved to incorporate especially relevant offers (Boston Red Sox tickets to New England customers, discounts to restaurants near the participant), or products with member-only pricing levels.
Verizon sees spikes in its redemption ever time it sends out a quarterly communication, according to Jane McCarthy, a senior marketing manager at Verizon.
There are potential pitfalls in using these types of rewards: According to Hlavinka, if the rewards are too lush, they can make a decision-maker uncomfortable – or even cause the corporate finance and ethics departments to get involved. Even the most personal rewards, such as a nice dinner, should be touted as opportunities for the company to grow its business.
And, as Hlavinka pointed out, “If you want to take your wife out for a job well done, nobody is policing that.”
Verizon has a safeguard against this: For larger rewards, the phone services firm requires written notification from the redeeming company’s CEO. “There is a redemption threshold,” McCarthy said. “We require a note on company letterhead before someone redeems points for a cruise to Hawaii.”
