One of the most significant outcomes of employee engagement programs is better customer engagement through improved customer service. Research shows a strong correlation between improved engagement and improved customer service scores.

It’s great that your customers are happier with your services and more likely to remain customers, but the impact goes much farther. The side benefit is that they become your living brand representatives, and may bring their networks to you.

Consumers have an ever-expanding array of options and are bombarded with traditional advertising across many channels every day. As David Edelman and Francesco Banfi write in their blog in The Economist, “Customers now are also often actively engaged with the brand – and their friends and peers – after they’ve bought the product or service using social media and the Web.”

Whether they are chatting on the sidelines of their kids’ soccer games or posting reviews on Yelp, customers are using word-of-mouth marketing to broadcast what their experience was, good or bad. And their opinions resonate. Shea Bennet reported in Adweek that “The average consumer mentions specific brands over 90 times per week in conversations with friends, family and co-workers, and shoppers trust Facebook (68 percent) more than blogs (63 percent) and retail websites (63 percent).” Your satisfied customers are your most powerful marketers.

With engagement programs linking the customer experience to recognition and rewards, many successful organizations understand this dynamic and are taking their customer engagement to a new level. They are launching Refer-a-Friend programs to harness these personal endorsements and also to control the messaging as much as possible.

The benefits are two-fold:

• Existing Customer – The relationship to the customer is deepened when you reward them for attaching their own reputation to yours by recommending your brand. By referring a friend or family member, they vouch for you. By establishing a formal Refer-a-Friend program, you can provide them with an easy way to connect their contacts to you. Offering rewards keeps the program top of mind and gives customers an incentive to act.
• New Customer – The new customer comes to you pre-qualified. Since the existing customer is generally not inclined to jeopardize their own personal relationships, they are likely to refer potential customers who resemble themselves and who can benefit from your products or services. The new customer also is more likely to buy from you, since their friend has vouched for the brand – better than any advertising!

Many Refer-a-Friend programs make the mistake of offering cash rewards. This may seem easy and desirable, but research shows that non-cash awards are much more efficient and effective.  An Incentive Research Foundation study confirmed that among many benefits, using tangible (i.e. gift card or merchandise awards)

• Increases the perceived value of the award
• Increases motivation by allowing program participants to justify the attainment of a highly desired item they might not be willing to purchase
• Adds trophy value to the reward
• Allows winners to discuss the reward – and your brand – when they might not discuss cash with others

An online platform offering a selection of rewards allows program participants to find the reward that exactly fits their personal aspirations. Connecting these drives for personal achievement or attainment with your brand and your program is powerfully motivating. To further boost performance, many companies offer platform levels, so that the potential for greater or additional rewards is always there.

We know that engaged employees create engaged customers and increase the bottom line. Leveraging that customer engagement with Refer-a-Friend programs grows your business.