Verizon Gets Personal With Business Customers
Verizon has boosted business retention rates with so-called Gemini rewards — those that stress both business and personal benefits.
The firm’s Business Link program generated a 21% spending lift over a simple credit-based rewards effort, and a 10% increase over a functional business awards scheme, according to Mary Pociask, a senior marketing manager at the telecommunications company.
It also has survived seven years, two mergers and a variety of managers.
Business Link has helped Verizon in a number of ways. For one thing, it’s enabled the firm to reduce churn. For another, it’s produced lifts of up to 31% in customer spending, said Pociask, speaking at the Direct Marketing Association’s recent Direct Marketing to Business conference in Orlando, FL.
Gemini awards appeal to the operational aspects of a business while acknowledging that corporate employees have a human side too, added Kelly Hlavinka, loyalty marketing practice leader for Frequency Marketing Inc., the program’s designer
Rather than offer traditional B-to-B loyalty incentives, such as dollars off merchandise or seminars, Gemini rewards combine ego gratification and personal recognition, she said.
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 mergers during the past seven years.
Business Link rewards firms that spend more than $125 per month over a 12-month period 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. As deregulated geographic areas matured, Verizon was able to target the customers it wanted to join.
Hlavinka noted that marketing campaigns’ financial results improve by between 10 and 30 percentage points when they use valid contact names. Verizon Business relies on accurate corporate contact information: 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 benefits and the points earned. 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. For example, Boston Red Sox tickets were offered to New England customers. In addition, some products were offered at members-only pricing levels.
The firm sees spikes in its redemption every time it sends out a quarterly communication, according to Jane McCarthy, a senior marketing manager at Verizon.
But there are potential pitfalls in offering lush rewards. According to Hlavinka, 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.
Verizon has a safeguard against this. For larger rewards, the phone services firm requires written notification from the redeeming company’s chief executive.
“There is a redemption threshold,” McCarthy said. “We require a note on company letterhead before someone redeems points for a cruise to Hawaii.”
