A new loyalty program

One of the primary benefits of having a robust brand is the phenomenon known as brand loyalty. In this instance, a certain set of consumers becomes so comfortable with a brand that it would never consider using any other. This can arise from conviction (this is the best product I have ever used) or just habit (this is the only product I have ever used). (There is a lesser-known aspect called consumer inertia, in which brands are never abandoned. If you don’t believe me, call me on my rotary phone and I’ll tell you about my quadraphonic eight-track music library.)

There are two reasons that brand loyalty is a benefit. The first is that it establishes a customer base that the producer of the brand can count on (as long as they hold up their end of the bargain, of course). The second is the evangelist quotient, or the extent to which consumers share their enthusiasm for the brand with other consumers – friends, family, etc., – thereby expanding the customer base at no cost to the producer.

The advertising manifestation of this is the endorser strategy – sometimes using celebrities, sometimes using everyday consumers, but always using perceived loyalists.

In employment marketing, we also see manifestations of employer brand loyalty. We all know people who would never consider leaving their current organization. We also know people who evangelize for their organization regarding career opportunities.

We recognize the marketing manifestation of this as the employee referral program. In this regard, it is interesting that almost every organization I encounter speaks proudly of the success of their employee referral program.
“We get 30% of our hires from our ERP. “
“We get 40% of our hires from our ERP.”
“We get referrals without offering a bonus.”

What I don’t get is why an organization would settle for 30% or 40% of hires. (Yes, I said settle.)

Imagine a producer putting a limit on customer referrals. (Begin alternate reality soundtrack.)

“How did you hear about us?”
“My friend bought a (insert favorite brand here) and absolutely loves the way it (insert favorite attribute here).”
“I see. I’m sorry, but we already received 40% of our sales from customer sales so I’m afraid we can’t do business.”

The reasons organizations limit their referral hires, or don’t try to move beyond the 30%-40% referral target seem quite reasonable.
“We’re not getting the right people. They’re not really qualified.”
“They’re too similar to the types of people we already have – we want more diversity.”

And so off our employment marketers go to manufactured messaging platforms that – guess what – have less of a quality and diversity ratio than those from the existing referral program – and the cost is not only higher, it’s shifted externally.

The issue of getting more from employer brand loyalists isn’t about the referral strategy. It’s about the referral program.

What employers should start thinking about is a preferral program, not a referral program. A referral program works on the premise that an employer notifies employees about open positions and employees think about who they know that would meet the requirements and do well in the organization, and then rise to action.

A preferral program first focuses on identifying employer brand evangelists at the height of their evangelism (when they first join the company), and staying with them throughout their employment experience. It asks these evangelists to identify potential referrals across all positions in the organization, regardless of whether they are open or not. By doing this, the organization builds a relationship marketing pipeline that it can introduce to the employer brand, providing the market with insight into the organization and instant notification when a position becomes open. In the process of attaching these individuals to your brand, you will also gain insight into them.

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Random rant
Just heard about this year’s MacArthur Foundation awards – the ones commonly referred to as the “genius award.” The winners get a large sum of money to use however they want, presumbly to pursue interesting ideas that will help humanity. Problem is, there are more idiots in the world then there are geniuses, so I propose starting a program that recognizes the bozos among us. Each year, thirty people are chosen by an anonymous panel. These thirty are recognized for something that was both idiotic and detrimental to society. In addition to being recognized, they are then given a bill for an exhorbitant amount that must be paid to their local community for putting up with them. Please send ideas for the name of this new award.

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Thomas Delorme
Written by Thomas Delorme

VP, Digital Products & Strategy

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