3 tips for building a customer incentive programme
Customer loyalty is a very important aspect of a good marketing strategy, especially during times of crisis. Consumers need someone or something they can trust, and it’s more economic, in the long run, to get returning customers than one-time shoppers. An Adobe report shows that US online merchants get 40% of their revenue from returning customers, even if these customers represent only 8% of the total website visitors.
One way to keep customers coming back aside from providing the best product and shopping experience is through a customer incentive program. A good example would be airlines, which deeply embedded their loyalty program to their go-to-market strategy
There are numerous incentives you can provide customers with which includes freebies, discounts, early access to new products, and rewards points. Whichever incentive you choose, the main objective of the program is to find out your customer sentiment by encouraging customers to repeatedly perform brand-building behaviors, which isn’t limited to making purchases.
Building a channel incentive plan can be overwhelming, what with multiple aspects to juggle, processes to set up, and components to consider. However, there are some initial things you should consider to help you facilitate the process as smoothly as possible.
Clearly Communicate Your Program KPIs
“Boosting sales” shouldn’t be the only goal, even if a number of organizations build their incentive programs on it. It’s simplistic and leads to many missed opportunities for business. Based on your business needs, you can use an incentive program to do the following:
- Warm-up a sales call
- Promote specific products
- Encourage users to opt into brand and marketing communications
- Increase referrals through word of mouth
- Promote product trials
You also required to be clear on what your program is trying to achieve. Create a team and develop a communications plan that will help customers know what the program is all about at launch. You’ll also need to craft a communication plan for the stakeholders in your organization. Communication should be ongoing for as long as the program is running to ensure that it will highlight different aspects of the program at opportune times. By keeping communication lines open, you can eventually leverage customer engagement to deliver key marketing messages to strengthen your brand and cement your position in the market.
What You Need to Know About Your Channel Partners
For a truly effective incentive program, you should take a look at the capabilities of your channel partners and how flexible they are. The customer journey has become a digital one, and your partners should be able to provide a proper mix of services that cover a variety of digital platforms and mobile applications. The type of partner you need will depend on what your business needs right now. Below are the main considerations when choosing the channel partner for your business. As you will see these are related to each other, but it would be easier to consider them individually before looking at the big picture.
Ensure that your partner has the resources to execute the incentive program and align expectations so there won’t be problems in the execution.
Ensure that your partner has the technical capabilities and knowledge for the program and that these fit into the overall requirements of the business. Partner competencies should coincide with what the business wants to achieve and what it stands for.
Ensure that your partner believes in and stands up for the same beliefs and core values that the business does. This will help align your needs and expectations with your partner.
Ensure that your business has similar goals with your partner or, at the very least, that your goals don’t conflict with your partner’s. For an incentive program to be successful, all participants should be invested in it 100%; otherwise, it will be a half-hearted effort at best and a disaster waiting to happen at worst.
How to Select the Right Incentives to Get the Outcomes You Want
Choosing the right incentives means knowing who your audience is and understanding what makes them loyal to a brand. Your program goal should be in line with what your audience wants and needs. Your incentive program should be designed according to what motivates your audience, and by the audience, this means your overall audience, not just your customers. Your audience should include your stakeholders, sales teams, employees, and channel partners, to name a few. Every participant in your incentive program and every individual or team instrumental in getting your product to market should be considered when designing an incentive program.
Offering the right incentives often means diving deep into your objectives and knowing what you want to achieve for the business and your customers. Below are the common customer incentives and what they can do to help your business.
Point-based online rewards are the simplest and most scalable from a performance perspective. This is ideal for targeting a wide audience with minimum investment.
Gift cards and cashback rewards
This incentive type is ideal if you’re looking to inspire growth due to its flexibility. It’s not that effective as a long-term strategy but enough to keep customers coming back for a while and remember your brand in the short term.
This is the most memorable among all the incentives because it provides customers an experience that they can come back to and share on social media. It’s also the one with the highest investment so use this only for those customers that you want to build long-term relationships with.
To sum it up a good customer loyalty program isn't a one-size-fits-all strategy; Your main goal is to offer the right reward to the right customer at the right time. Give customers the element of surprise, excitement, entertainment, and most importantly, the fear of missing out so they will keep coming back. Getting loyal customers is a two-way street, after all. You must give to receive—and in this case, both your business and its customers ultimately become the winners.
Alon is an Israely product and marketing executive with a track record in leading customer centric product management and inbound marketing strategy. While improving user engemenemt and customer, I help Start Ups achieve product market fit and expand their online footprint. I specialize in technology, entrepreneurship, customer experience.