The financial impact of not caring about recognition or rewards in your business

The financial impact of not caring about recognition or rewards in your business

Guest post from Colin Eglington, CEO at Simpy Thank You  With a business named Simply Thank You, I like to think I know a bit about recognition. But

Guest post from Colin Eglington, CEO at Simpy Thank You 

With a business named Simply Thank You, I like to think I know a bit about recognition. But whilst recognition and gratitude is often seen as a ‘nice to have’, there’s also a benefit to profits when you pay attention to reward and recognition across your business.

 

Let’s take an example.

 

Employee engagement

 

Company X are out to make money at any cost. They hire reasonably well, but pay their employees poorly. The job spec doesn’t relate to the reality of the workload, and there’s no thanks or celebration of success, so morale is down. Perks start and end at a ping pong table. People leave – often. Company X shrug this off as the nature of work right now – but they pay for this in recruitment fees, advertising jobs, time to interview and hire, training fees and of course – the catastrophes, missed deadlines, blunders and errors caused from disengagement and the revolving door of employees.  The cycle of hiring and retraining goes on and on.

 

Company Y are also out to make money – but for how to get there, they take a different path. It may seem softer, but they focus on reward and recognition and fair pay for the right people. They use an incentive platform to track how people perform, and reward a job well done with tangible treats, combined with verbal recognition. It seems hard at first, but they stick at it. Spot rewards, competitions, get togethers – they pay upfront and they make it part of their culture.  The result? The atmosphere is great. Employees know what’s expected of them, and the data speaks volumes. Long tenure means excellent Glassdoor reviews which attracts more employees, and they become a team that sticks together that creates better work, faster. Clients are happy – so they win more business.  They start to lap company X.

 

 

Customer service

 

Let’s say at the same time, company X are also not interested in retaining customers but with their strategy of not being all that hot on employee recognition, reward or running a fair business, they’re managing to lose them. It seems customers can sense that the people they speak to simply don’t care.

 

Did you know that dissatisfied customers typically tell nine to 15 other people about their experience, and some tell 20 or more?

 

Let’s say that Company X manage to annoy, irritate or insult just a small handful of 10 customers a month. Over the year, that’s 120 people who have passed on their warnings to perhaps 2,400 people.

 

Let’s say some of them use a free online review service. With its eye-catching star design, they will be seen on Google’s organic search results page. Suddenly, company X is now paying for damage limitation and current customers might also be stumbling upon these negative reviews. The doubt is setting in. Perhaps they should switch now…Before anything goes wrong.

 

On the other hand, company Y has invested in retention, and have empowered employees to be able to win back customers who are unhappy.  They use a platform to do this, so decisions are in the hands of employees, who feel useful and able to make positive changes, and the customer gets a gift that feels personal and relates to their situation. Instead of a negative review, they leave a positive comment and a photo of their gift and a message of thanks on Twitter that’s seen by thousands of followers, and their followers of their followers. Company Y has turned a negative into a positive piece of PR, whilst company X is now paying a marketing and PR firm to fix the damage they’ve suffered from negative complaints.

 

Marketing

 

When Company Y want more leads and customers, they have their reputation – but they also use rewards. They know that 54% of consumers say that they would consider doing more business with a company for loyalty rewards and that people find it hard to switch companies, so they use a platform to again give a gift or an incentive,  a thank you for switching to their business. It doesn’t cost the earth.

 

Meanwhile, Company X holds its purse tightly shut and puts money into other areas,  yet because company Y shows generosity and cuts through the noise – the customers move from company X, over to company Y, and then they stay put.

 

The lesson

 

Whilst Company X and Company Y aren’t real, the situations are. Companies that are able to integrate recognition and rewards into their whole business, from marketing and HR to customer service see massive financial gains.

 

Now is the time to be a company Y.

 

There are so many stats that prove the financial implications or reward and recognition, but they are easy to ignore.

 

My advice would always be test, test and test again.

 

If you can take real data from real-life experimentation, I know you will be astounded with the results.

 

So there we are, a soft-sounding business strategy, with sound business results.

 

It’s simple when you know how!

 

 

 

 

 

 

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