From travel and hospitality offers, to incentives on concert and sporting event tickets and that Starbucks card in your wallet, we’re a society that loves our perks. In the U.S. alone, consumers hold over 3.8 billion memberships in customer loyalty programs—and that number continues to grow.
A rewards program isn’t just a way for brands to give back to their customers. A solid program can help drive and build customer loyalty, deepen engagement and even attract new customers and create product awareness. On the flip side, a poorly executed rewards program will come back to bite you, so there are some best practices you'll want to follow.
Incentive Program Basics
First of all, you need to offer a reward that is enticing enough to draw customers in. A recent Neilson survey shows that more than half of loyalty and rewards participants say product discounts or monetary rewards in the form of rebates or cash back are the most valued. Generic deals create little interest. Make sure you know enough about your customers and their needs to deliver value through your reward offers.
Make the Experience Special and Smooth
Offering a reward doesn’t automatically create brand loyalty. You have to earn that loyalty by also ensuring an enjoyable customer experience, following up or rewarding repeat visits or purchases. You want to make every part of the reward experience pleasurable for your customer to create an affinity with your brand.
The first half of this is making the experience special for the consumer. Underscore the benefit of your program, whether it’s offering deep discounts or invitations to special events that aren’t open to the public. Go the extra mile and surprise them with rewards or discounts they’re not expecting. If you’re mailing physical rewards, this should go right down to the packaging and the presentation. Think of this as a gift you are sending—don’t send it in a boring, plain brown box. Spend the extra money to give it a little pizzazz. Personalize it and send a thank you card, for example.
You also need to make the rewards experience smooth. I can’t stress how important this is. Don’t make them jump through too many hoops to sign up, follow through or receive their rewards. Be sure to have to have multiple communication channels that can resolve any question consumers may have: via chat, website, an 800 number, email correspondence, etc. Also, practice frequent communication. If someone signs up for a reward or program, keep them informed. Send an email validation letting them know they’ve applied successfully. If you’ll be sending a physical reward, keep them aware of what is going on with that by providing tracking information and updates. Lastly, be flexible. Consumers will find programs more appealing if they are able to earn rewards regardless of whether a purchase was made in the store, on a website or on a mobile device.
Don't Keep Customers in the Dark
Be sure to reward the customer as promised and do it in a timely fashion. If a consumer has no idea when the reward is coming, they will have to waste a lot of their time (and your time) following up on it. This lack of communication causes a lot of bad feelings toward your brand—and the reward becomes more of a hassle than anything else. Believe it or not, some companies will only actually ship a reward if the customer contacts them first wondering where it is. They actually budget for a certain amount of people not to collect. Not cool, and this will cost your brand loyalty.
Successful Incentives in Action
By keeping the consumer well informed and following through afterwards, you will ultimately drive down the cost of your incentive program while improving relationships with your customers.
I'll give you an example. We had a client come to us because they’d had a negative experience with their rewards program. They weren’t communicating with their customers to keep them informed, and they were actually holding the rewards for processing and presorting every two weeks to save money on postage. This was a huge time delay, and naturally customers got ticked off. The influx of angry calls they received required a good number of call center representatives to manage, and these negative experiences were doing damage to their brand.
I worked with this client to orchestrate a deal with DHL for package delivery without presorting. We set up a website, online chat, and handled timely email communications throughout the program. This not only increased customer satisfaction, but it also decreased the cost of the program. In a survey following the program, we found that over 6,800 people were highly influenced by the promotion and inspired to make a further purchase. The company gained a nice $4 million in sales that they otherwise may not have claimed.
Generating good will through a valuable, well-orchestrated incentive program like this can drive loyalty and a purchase. And that’s a gift we all want!