Verizon Puts a Different Spin on Loyalty Rewards

Verizon Wireless in late July introduced a loyalty program that rewards customers for such everyday activities as signing into their My Verizon online accounts, paying bills on time, using the Verizon trade-in program, or choosing paperless billing.

Verizon Smart Rewards offers a variety of rewards in exchange for points that customers earn. Customers who sign up for Smart Rewards automatically receive 10,000 points. Activities generate more points every month.

The program delivers discounts on brand-name merchandise and deals on dining and travel. All merchandise includes a lowest-price guarantee, and shipping is free.

Verizon is sweetening the deal with discounts on Verizon-specific products, opportunities to win NFL game tickets, greater discounts through daily deals, and regular auctions and sweepstakes. The company promises to add new offers to the Smart Rewards catalog every day.

Emily Collins, customer loyalty research analyst at Forrester Research, says the program is a creative way for Verizon to increase customer engagement. “In mobile, there’s not a lot that a company can do to build engagement,” she says. “From a loyalty perspective, not many telcos have thought like this because they have built-in loyalty with their two-year contracts.”

Collins also sees the program as a great way for Verizon to show that it values its customers in an age when switching service providers is common. “It’s about rewarding behaviors that keep customers engaged with Verizon,” she says. “It’s about increasing their engagement rather than having them just mindlessly move through their contracts.”

But Verizon’s motives are not entirely altruistic. Customers will need to first enroll in the carrier’s ad-targeting program, Verizon Selects, to be part of Smart Rewards. They will, however, receive 2,500 bonus points for being part of Verizon Selects and 500 Rewards points per participating line each month.

Collins says the program could deflect calls from Verizon’s contact centers, rewarding customers for self-service activities that previously would have involved speaking with live agents.

Collins expects other telcos to start offering similar programs before the concept spreads to similar markets, such as utilities and TV and Internet service providers. “I can see a lot of interest in industries where customer engagement is typically very low,” she says. 

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