Gain Brand Advocates: The Unexpected Way of Using Rewards

In customer service, resolving issues and turning dissatisfied customers into happy ones is paramount. One common approach is offering discounts as compensation. However, recent insights suggest that providing a gift card instead of a discount can have a more positive impact. In this article, we will explore how offering a gift card to unsatisfied customers can transform their perception, shifting from feeling like an invoice to experiencing a reward. Companies will level up their customer service team’s performance.

What is a brand advocate?

At Huuray, we believe that a brand advocate is a customer who not only loves your product or service but also actively promotes and recommends it to others. They go beyond being satisfied customers by becoming enthusiastic supporters of your brand. These individuals often share their positive experiences with friends, family, and colleagues, both online and offline.

• Brand advocates are essential for businesses as they help generate positive word-of-mouth, which leads to increased brand awareness and customer acquisition.
• They are trusted sources of information and their recommendations carry weight among their networks.
• They are often the first to try your new offerings, actively participate in discussions on social media, and provide valuable feedback.
• They may also create user-generated content, such as testimonials, reviews, or social media posts that showcase their positive experiences with your brand.

Unlike traditional marketing efforts, brand advocacy is organic and authentic. It is driven by genuine enthusiasm and loyalty rather than monetary incentives. A happy customer can become a brand advocate when they feel a strong emotional connection to your brand and believe in its values and mission.

Who are your brand advocates?

Who are your brand advocates? Here are some key individuals who can become your most loyal and enthusiastic supporters:

1. Satisfied Customers: The foundation of brand advocacy lies in creating exceptional customer experiences. Satisfied customers who have had positive interactions with your brand are more likely to become advocates. Their positive experiences and word-of-mouth recommendations can greatly influence others.
2. Repeat Customers: Customers who consistently choose your brand over competitors are more likely to become brand advocates. Their loyalty and trust in your products or services make them valuable advocates who will speak highly of your brand to others.
3. Employees: Your employees play a crucial role in brand advocacy. They are the face of your company and have first-hand knowledge of your products or services. When employees are engaged, motivated, and proud to work for your brand, they can become powerful advocates who promote your brand both inside and outside the workplace.
4. Industry Experts: Industry experts and thought leaders who endorse your brand can also become brand advocates. These individuals possess knowledge and credibility in your industry, making their recommendations highly influential. Partnering with industry experts and seeking their endorsements can boost your brand’s reputation and attract new customers.
5. Online Reviewers: Online reviewers, such as those on platforms like Yelp or Google Reviews, can become brand advocates if they have positive experiences with your brand. Their reviews and ratings can greatly impact the perception of your brand and influence potential customers.

Why should companies invest in creating brand advocates out of unhappy customers?

• According to BHN Rewards, more than 80% of consumers say they trust recommendations from friend and family, more than any other advertising format.
• 49% of marketers believe that 20-40% of their leads come from referrals. (Influencer Marketing Hub)
• Millennials are 115% more influenced by word of mouth than by traditional advertising. (Influencer Marketing Hub)
• Peer-to-peer marketing is the leading driver behind 20-50% of all purchasing decisions. (Influencer Marketing Hub)
• 90% of consumers are likely to purchase more than once, and 93% are likely to become repeat customers at businesses that offer excellent customer service. (HubSpot)
• After receiving poor customer service, 33% of customers would immediately consider switching firms. (HubSpot)
• After receiving good customer service, 89% of customers are more likely to make another purchase. (HubSpot)
• 40% of consumers change products or services because a competitor provides superior customer service. (Referral Rock)

Related: 60+ Brand Loyalty Stats You Need To Know

The Perception of Discounts

When customers experience a problem or receive subpar service, businesses often provide discounts on future purchases as a form of compensation. While discounts can be a practical solution, they may not always achieve the desired effect on customer satisfaction. Here’s why:

1. Transactional Perception

Discounts are often perceived as transactional, reducing the emotional connection between the customer and the business. Customers may view the discount as a mere monetary adjustment, focusing more on the value they lost rather than feeling truly rewarded.

2. Negative Association

Some customers may associate discounts with admitting fault or devaluing their initial purchase. They may interpret a discount as an acknowledgment of the business’s shortcomings or view it as an invoice reminding them of the negative experience.

Pros and cons of discounts:

Offering discounts is a good idea in the right context, but they are not the solution to dealing with unsatisfied customers. We covered some of their advantages and disadvantages.

Pros of Discounts:

• Attracting New Customers: Offering discounts can entice new customers to try your products or services, especially if they are price-sensitive or hesitant to make a purchase.
• Encouraging Repeat Purchases: Discounts can incentivize existing customers to make additional purchases, increasing customer loyalty and retention.
• Clear Financial Benefit: Discounts provide a clear financial benefit to customers, making them feel like they are getting a good deal and potentially increasing their overall satisfaction.

Cons of Discounts:

• Diminished Perceived Value: Constantly offering discounts can devalue your products or services in the eyes of customers. They may start to view your offerings as being of lower quality or not worth the original price.
• Profit Reduction: Discounts can eat into your profit margins, especially if they are offered frequently or on a large scale. This can impact your ability to invest in other areas of your business or maintain financial stability.
• Conditional Loyalty: Customers who are primarily motivated by discounts may not be loyal to your brand in the long term. They may switch to a competitor offering a better deal, undermining the effectiveness of the discount strategy.
• Negative Brand Perception: Excessive discounting can create a perception that your brand is constantly struggling or desperate for sales, potentially diminishing its reputation and credibility.
• Unrealistic Expectations: Offering discounts may set a precedent for customers expecting discounts in the future. This can lead to dissatisfaction if discounts are not consistently available or if they are not as generous as previous offers.

Shifting Perspective: Gift Cards as a Solution

Instead of offering discounts or refunds, consider using gift cards as a way to handle unhappy customers. Gift cards offer several advantages over discounts and refunds that can help transform the customer’s perception of your brand:

1. Meaningful Gesture

Offering a gift card to a different retailer shows that you are genuinely interested in offering something meaningful to the customer. It demonstrates a willingness to go above and beyond to make things right.

2. Personalized Experience

Gift cards allow customers to choose something they truly want or need, providing a personalized experience. This can create a positive association with your brand, as they feel valued and understood.

3. Increased Perceived Value

Unlike discounts, gift cards are seen as a separate currency that the customer can use for a future purchase. This increases the perceived value of the gift and makes the customer feel like they are receiving something of higher worth.

4. Positive Word-of-Mouth

When customers receive a gift card and have a positive experience with the brand they choose to use it at, they are more likely to share their positive experience with others. This can lead to word-of-mouth recommendations and potentially turn the unhappy customer into a brand advocate.

The Transformation with Gift Cards

In contrast to discounts, offering a gift card as compensation can generate a more positive and rewarding customer experience. Here’s why gift cards have the potential to transform a customer’s perception:

• Emotional Impact: Gift cards evoke a sense of appreciation and surprise. Customers often interpret them as a reward, feeling valued and recognized for their loyalty. The emotional response generated by receiving a gift card can help shift the customer’s focus from the initial negative experience to the opportunity for positive future interaction.
• Freedom of Choice: Gift cards empower customers by allowing them to choose their desired product or service. This element of choice enhances the perceived value of the compensation, as customers can select something they genuinely desire or enjoy. It fosters a sense of ownership and control, further contributing to a rewarding experience.
• Enhanced Relationship Building: Offering a gift card sends a powerful message of goodwill and demonstrates the company’s commitment to customer satisfaction. It can strengthen the bond between the customer and the business, encouraging future engagement and loyalty. Customers may feel more inclined to share positive experiences and recommend the business to others.
• Psychological Perception: Gift cards tap into the principles of behavioral economics. They trigger a mental separation of the compensation from the negative experience, allowing customers to view the gift card as an isolated positive outcome. This separation helps break the association with the negative event and promotes a more optimistic perception of the business.

Pros and cons of gift cards:

Gift cards are incredibly useful in a variety of situations, offering numerous benefits for both businesses and customers. Whether it’s for customer compensation, employee rewards, or promotional campaigns, gift cards have proven to be a valuable tool. Here are some of their advantages and disadvantages:

Pros of Gift Cards:

• Emotional impact: Gift cards can create a positive and rewarding customer experience by evoking a sense of appreciation and surprise.
• Freedom of choice: Customers can select their desired product or service, enhancing the perceived value of the compensation.
• Enhanced relationship building: Offering a gift card demonstrates a commitment to customer satisfaction, strengthening the bond between the customer and the business.
• Psychological perception: Gift cards help separate the negative experience from the positive outcome, promoting a more optimistic perception of the business.
• Reciprocity and positive word-of-mouth: Gift cards can encourage customers to reciprocate by continuing their patronage or sharing positive experiences, leading to positive word-of-mouth and attracting new customers.

Cons of Gift Cards:

• Cost: Offering gift cards as compensation requires a financial investment from the company.
• Limited use: Gift cards can only be used at specific retailers, potentially limiting the options for customers.
• Potential for expiration: Gift cards may have expiration dates, which can create frustration or dissatisfaction if customers are unable to use them in time.

We’re not the only ones saying this

• According to a study by Blackhawk Network, 59% of consumers believe that receiving a gift card as compensation makes them feel more valued by the brand compared to receiving a discount or other forms of compensation.
• The National Retail Federation’s research also shows that 72% of customers who receive a gift card are more likely to visit a store or website they had not previously considered. This suggests that gift cards can attract customers to explore new offerings or make additional purchases beyond the value of the card itself.
• According to a study by Parago, 75% of customers who receive a gift card as compensation are more likely to become repeat customers. The act of giving a gift card can trigger a sense of reciprocity, fostering a stronger bond between the customer and the brand.
• Offering a gift card can have a positive impact on word-of-mouth marketing. A study by HelloWorld found that customers who received a gift card were 72% more likely to recommend the brand to others. Satisfied customers who feel rewarded are more inclined to share their positive experiences, potentially amplifying brand advocacy.

Related: Consumer Incentives: The Ultimate Guide in 2023

How to turn unhappy customers into brand advocates?

While it’s important to focus on creating positive experiences for customers, it’s inevitable that some may have negative experiences or complaints. However, these unhappy customers can still be turned into brand advocates if their concerns are addressed positively. Here are some steps to follow:

1. Listen and empathize: When an unhappy customer reaches out with a complaint, listen attentively and show empathy towards their situation. Let them know that you understand their frustration and genuinely care about their experience.
2. Apologize and take responsibility: Take responsibility for any mistakes or shortcomings that may have caused the customer’s unhappiness. Offer a sincere apology for the inconvenience or dissatisfaction they have experienced.
3. Offer a meaningful solution: Instead of simply offering a discount or refund, consider offering a gift card to a different retailer that aligns with the customer’s interests. This shows that you are genuinely interested in making things right and offering something of value to the customer.
4. Resolve the issue promptly: Take immediate action to resolve the customer’s issue or complaint. Whether it involves addressing a product defect, providing additional support, or offering a solution, make sure to follow through and keep the customer informed throughout the process.
5. Follow up and show appreciation: After the issue has been resolved, follow up with the customer to ensure their satisfaction. Thank them for bringing the issue to your attention and let them know that their feedback is valuable. This step not only shows your commitment to customer satisfaction but also provides an opportunity to build a lasting relationship with the customer.

Brand advocates vs brand ambassadors

Brand advocates and brand ambassadors are both valuable assets to any company, but there are some key differences between the two.

Brand advocates are customers who have had positive experiences with a company and willingly promote or recommend the brand to others. They are natural and authentic advocates who genuinely believe in the brand and its products or services. Brand advocates may share their positive experiences through word of mouth, social media, online reviews, or other forms of communication.

On the other hand, brand ambassadors represent individuals who have a formal relationship with a company to promote its products or services. They are often paid or receive some form of compensation for their promotional activities. Brand ambassadors may include celebrities, influencers, or industry experts who have a significant following and can reach a wide audience.

While both brand advocates and brand ambassadors can help increase brand awareness and attract new customers, there are some distinctions between the two:

1. Relationship with the brand

Brand advocates are typically existing customers who have had positive experiences with the brand. They have a personal connection and loyalty towards the brand. In contrast, brand ambassadors may not have a prior relationship with the brand and are often chosen based on their influence and reach.

2. Motivation

Brand advocates promote a brand out of genuine satisfaction and belief in the company and its offerings. They are not motivated by financial gain but rather by their desire to share their positive experiences. Brand ambassadors, on the other hand, may be motivated by compensation or other incentives provided by the company.

3. Reach and influence

Brand advocates may have a smaller reach and influence compared to brand ambassadors. While brand advocates may primarily share their experiences with friends and family, brand ambassadors often have a larger following and can reach a wider audience through their social media platforms or other promotional channels.

4. Authenticity

Brand advocates are seen as more authentic and trustworthy by consumers because they have a genuine connection to the brand. They are not perceived as being paid or influenced by the company. In contrast, brand ambassadors may be viewed as less authentic due to their formal relationship with the brand and potential financial incentives.

Related: Incentive Pay: Boost your Team’s Motivation with Gift Cards

How to streamline the process of offering gift cards?

Offering gift cards to unhappy customers can be an effective way to turn their negative experience into a positive one. However, manually ordering and distributing gift cards can be time-consuming and inefficient. To streamline this process, consider using a gift card software provider or a Gift Card API.

A Gift Card API allows you to automate the ordering and distribution of gift cards. With an API, you can integrate gift card services directly into your customer support system or CRM software. This eliminates the need for manual data entry and ensures a seamless experience for both you and your customers.

Benefits of using a Gift Card API:

• Efficiency: By automating the gift card ordering process, you can save time and resources. With just a few clicks, you can order and distribute gift cards to unhappy customers, allowing you to resolve their issues quickly and efficiently.
• Customization: A Gift Card API allows you to customize the gift cards based on your brand’s design and messaging. This ensures a consistent brand experience and reinforces your commitment to customer satisfaction.
• Integration: An API can be easily integrated with your existing systems, such as your customer support software or CRM. This means that you can manage the ordering and distribution of gift cards directly from your preferred platform, without the need for additional software or manual processes.
• Tracking and Analytics: With a Gift Card API, you can easily track the usage and redemption of gift cards. This provides valuable insights into customer behavior and allows you to measure the effectiveness of your gift card program.
• Scalability: As your business grows, so does the demand for gift cards. A Gift Card API allows you to easily scale your gift card program to meet the needs of your expanding customer base.

Tips for a successful reward program implementation

When using gift cards to gain brand advocates, it is important to consider the following tips:

• Personalize the rewards: Tailor the rewards and incentives based on the preferences and interests of your brand advocates. This shows that you value their individuality and makes the rewards more meaningful to them.
• Make it exclusive: Offer rewards that are exclusive to brand advocates, creating a sense of exclusivity and making them feel special. This can include early access to new products or limited edition items.
• Provide value: Ensure that the rewards and incentives provided are valuable to your brand advocates. This can be in the form of discounts on future purchases, free gifts, or access to premium content.
• Encourage social sharing: Encourage brand advocates to share their positive experiences on social media by offering incentives such as contests or giveaways. This not only increases brand awareness but also helps generate user-generated content that can be used for further marketing efforts.
• Recognize and appreciate: Continuously recognize and appreciate the efforts of your brand advocates. This can be done through personalized thank-you messages, featuring them on your website or social media platforms, or even sending them surprise gifts or rewards.

By using gift cards effectively, companies can turn unhappy customers into brand advocates. When customers who had a negative experience are provided with exceptional customer service and rewarded for their loyalty, they are more likely to become ambassadors for the brand and share their positive experiences with others. By implementing a successful reward program, companies can not only retain these customers but also attract new ones through word-of-mouth marketing.

Related: Employee Incentive Programs: The Ultimate Guide to Retaining Top Talent in 2023

How do you measure the success of a brand advocate program?

Measuring the success of a brand advocate program is crucial in order to track the effectiveness and ROI of your efforts. Here are some key metrics and strategies to consider when measuring the success of your brand advocate program:

• Net Promoter Score (NPS): NPS is a widely used metric that measures the likelihood of customers recommending your brand to others. By surveying your brand advocates and calculating their NPS, you can gauge their satisfaction and loyalty, which directly correlates to the success of your program.
• Referral Traffic: Monitor the amount of website traffic that is generated through referrals from brand advocates. By tracking the number of visitors who come to your website via referral links, you can measure the impact of your brand advocates in driving new leads and potential customers.
• Conversion Rates: Track the conversion rates of leads that are generated by brand advocates. By analyzing how many referrals from brand advocates actually convert into paying customers, you can evaluate the quality and effectiveness of your advocate program.
• Social Media Engagement: Measure the engagement levels on your social media platforms, such as likes, comments, shares, and mentions. Brand advocates are likely to actively promote your brand on social media, so monitoring these metrics can provide insights into the reach and impact of their advocacy efforts.
• Customer Lifetime Value (CLV): Calculate the CLV of customers acquired through brand advocates versus those acquired through other channels. By comparing the long-term value of these customers, you can determine the contribution of brand advocates in driving revenue and customer loyalty.
• Customer Surveys: Conduct regular surveys to gather feedback from your brand advocates. Ask them about their experience with your products or services, their satisfaction level, and their willingness to recommend your brand to others. This feedback can provide valuable insights into the success of your advocate program and help identify areas for improvement.
• Testimonials and Reviews: Monitor the number and quality of testimonials and reviews left by brand advocates. Positive reviews and testimonials from satisfied customers can be powerful marketing tools and can contribute to the success of your advocate program. Keep track of the number of reviews and their impact on your brand’s reputation and credibility.
• Customer Retention: Measure the retention rate of customers acquired through brand advocates. A high customer retention rate indicates that your advocate program is effectively cultivating long-term relationships with customers and fostering loyalty.
• Cost per Acquisition (CPA): Calculate the cost per acquisition of customers through your advocate program compared to other marketing channels. If your advocate program is driving new customers at a lower cost, it indicates a successful and cost-effective strategy.
• Feedback and Suggestions: Pay attention to the feedback and suggestions provided by your brand advocates. They are likely to have valuable insights and ideas for improving your products, services, and customer experience. Incorporating their feedback can lead to increased customer satisfaction and loyalty.

Remember, measuring the success of your brand advocate program is an ongoing process. Regularly review and analyze these metrics to track progress, and make necessary adjustments.

Final thoughts

In conclusion, companies have the opportunity to transform unhappy customers into brand advocates by shifting their perspectives on customer service. Rather than offering a simple discount or refund, companies can show genuine interest and concern by offering a gift card to a different retailer. This gesture not only addresses the customer’s immediate dissatisfaction but also presents an opportunity to create a meaningful connection with the brand. By handling difficult situations with empathy and providing a positive experience, companies can increase the likelihood of turning unhappy customers into loyal brand advocates. It is crucial for companies to embrace this shift in perspective and utilize strategies like the Gift card API to streamline the process. By doing so, companies can not only resolve customer issues but also gain valuable brand advocates who will spread positive word-of-mouth and contribute to long-term business success.

Frequently asked questions about brand advocates