Key features of effective reward programs

2012-01-23T08:08:00.000-08:00

Reward programs exist in a seemingly infinite number of guises and can offer a huge range of opportunities for customers and consumers alike. From business point of view they help us collect extensive market data, help us increase customer loyalty and generally increase profitability. The business benefits are extensive and numerous and from the customers point of view they are getting something of value just for making purchases that in many cases they would have made any. Reward programs have become one of the best “tricks” marketing companies have ever implemented and utilising them effectively is incredibly beneficial in almost every sector of business there is. With that in mind we turn to look at the key ingredients that make an effective reward program.

Firstly a reward program most obviously needs to offer value to YOUR customers. You can’t stress the word you’re here enough as it is targeting your rewards that will mean you convert customers into loyal ones. Offering OAP’s a free website or a spa day is unlikely to really increase their desire to shop with you or to collect reward points. Offering something they will want – like a discount or money off essentials is however going to pique their interests. Targeting your promotions and rewards and ensuring that they are seen as valuable to your customers is the only way a reward program can work well!

Secondly, and in essence tied to the first point, we also need to be offering modularity in our programs. This means that we need options at each level and tiers of options to appeal to each level of customer. This is particularly applicable in diversified markets where we appeal to varying demographics but it also needs to apply to individual cases. For example a set of level one reward options might be – 10% off in store, a family meal for four at x, 50% off a spa day etc. etc. Level 5 rewards might be less numerous but could include say a city break for two or a weekend retreat somewhere. Integrating variety and tiers into your program means that you can let it appeal to the widest possible section of your market and encourage new customers and existing ones to increase their spending with you.

Thirdly, a good reward program needs to integrate marketing and community into its deployment. This gives you a chance to espouse your values and worth to your customers but it also provides them with a platform for feedback and to increase their perceived value to your company on a personal basis. This can be achieved through a variety of direct and indirect marketing approaches but needs to form the bedrock of the reward program itself. Likewise integrating marketing with free rewards gives you the opportunity to test new marketing initiatives and build personal customer relationships.

Finally a good reward program needs to be marketed effectively to ensure that your customers know about it and that they are given the opportunity to participate.

These four concepts really form the core of what makes a good reward program and we cannot ignore any element or exclude one element in favour of another.

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Key features of effective reward programs