Think about your last customer service experience. Did you speak to a human? Was it efficient and friendly? Did you find the answers or help you were looking for? Or were you sent down a labyrinth of canned answers, none of which answered your questions, ultimately declaring “talk to an agent” into the seeming void?
In a world of chatbots and call menus, a live, empathetic, and knowledgeable customer service representative can be a major power player in your loyalty strategy, incentivizing your most active customers to join a paid loyalty program or work their way up in a free program, and remain there. For your top-tier members, don’t underestimate the promise of convenient, personalized service. If you’re ready to move beyond points to premium benefits, with a matching elevated experience that makes your customers feel valued, respected, and understood, exceptional customer service can be the ultimate differentiator.
For top-tier loyalty members, and especially within a paid program, a brand can offer a level of support that transcends the typical customer service experience, justifying the membership fee and fostering a deeper, more lasting connection — transforming a loyalty program from a simple rewards system into an exclusive, high-value club for only the most valuable of customers..
The Critical Link Between Service and Loyalty
Customer service is more than just a support function; it’s a core driver of customer retention and brand loyalty. Positive experiences and efficient problem resolutions build trust and emotional connections, while a single negative interaction can lead to customer churn. Consider this:
A significant 73% of consumers consider customer experience a key factor when making a purchase, second only to price and product quality. Moreover, 42% would pay more for a friendly, welcoming experience and 65% find positive experiences with a brand to be even more influential than advertising (PwC). And, in line with the customer service paradox, successfully resolving a problem for customers on the edge can ultimately make them more loyal to your brand, even after a mishap (Harvard Business Review). Conversely, about half of consumers (49%) have left brands they’ve been loyalty to due to poor customer experiences (Emplifi).
Why Customers Will Pay for Premium Service
The concept of paying for better service isn’t new. Consumers willingly pay for expedited shipping, express lanes at amusement parks, or business class flights to receive a better, faster, and more comfortable experience. A paid loyalty program that includes premium customer service leverages this same principle – just with a more consistent stream of new revenue to support it. Customers are willing to pay for things that save them time, reduce friction, and make them feel special.
- Valuing Time and Convenience: In a fast-paced world, time is a premium commodity. By offering priority phone lines, dedicated support, or instant chat with a real person, a brand is saving its top customers valuable time. This convenience becomes a core benefit that they are willing to pay for.
- A Sense of Exclusivity and Status: A paid tier naturally creates a sense of exclusivity. Only those who have invested in the program or tier of a program get to enjoy its benefits. Premium customer service reinforces this by treating these members as VIPs, making them feel like part of an inner circle.
- Guaranteed Quality of Interaction: Instead of facing a long wait time or a frustrating automated system, paying members are guaranteed a higher quality of interaction. This predictability and reliability are valuable in a world where customer service can often be a gamble.
An alternative approach is to offer premium customer service to only the top tier of a free loyalty program, with the benefits above incentivizing upward migration of your most engaged members. It’s worth noting, however, that this approach can have a have a more significant impact on your budget, resulting in a longer time to break even — if you get there at all. In this case, it might financially make sense to only offer it to the top 2-5%, which may limit the impact of increasing brand affinity and inspiring loyalty to a larger swath of members
The Business Case: Loyalty’s Impact on the Bottom Line
Incorporating premium customer service into your loyalty program is a sound business strategy with tangible financial benefits.
- Increased Profitability: Acquiring a new customer is significantly more expensive than retaining an existing one (Qualaroo). Studies show that a 5% increase in customer retention can lead to a 25-95% increase in profit (Bain & Company). Your most loyal customers are also your most profitable, with some research indicating that 65% of a company’s revenue comes from its existing customers (DemandSage).
- Higher Customer Lifetime Value (CLV): Loyal customers tend to spend more over time. On average, loyal customers spend up to 67% more than new customers (DemandSage). By providing premium service, you encourage them to stay with your brand and increase their overall spending.
- Brand Advocacy: Happy, well-cared-for customers become your best marketers. They are more likely to recommend your brand to friends and family. According to some research, 82% of customers would recommend a company based solely on excellent customer service (Nicereply), and 86% of loyal customers will recommend a brand to their network (Qualaroo).
- Dependable Incremental Revenue: A paid loyalty tier with benefits like concierge customer service adds a direct, recurring revenue stream from membership fees
.. 54% of consumers are willing to participate in a subscription-based paid enrollment program if the benefits are valuable. Additionally, paid loyalty programs help drive incremental revenue from members’ increased spending (ebbo Data Study).
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How to Structure a Premium Customer Service Benefit
To make premium customer service a compelling reason to join a loyalty program, a brand needs to clearly define and deliver on these elevated benefits.
- Priority and Personalized Support: For your most valuable customers—whether they are top-tier members in a free program or paying members—give them a dedicated VIP channel for customer service. This could be a special phone number, a direct chat, or a specific email address that guarantees a faster response and resolution time.
- Proactive Service: Don’t wait for a problem to arise. Use data from your loyalty program to anticipate your top members’ needs and proactively reach out to them before they even have to call, demonstrating that you are attentive and care about their experience. If a member’s recent order is delayed, a dedicated service agent could send a personalized message to inform them of the delay and offer a solution.
- Dedicated Account Managers: For your most elite, high-spending members, a dedicated account manager provides a single, consistent point of contact. This person understands their history and preferences, creating a highly personalized experience that builds an incredible sense of trust and loyalty.
- Tiered Support Models: In a paid program, a brand can offer a tiered system. For example, a basic free program might have standard email support, while a paid tier could offer a dedicated phone number with a minimum average wait time.
By making excellent customer service a cornerstone of your loyalty program, you’re not just offering a perk—you’re building a relationship. This approach turns transactional customers into brand advocates and fosters a level of loyalty that is critical for long-term business growth.
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ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.