In a competitive global marketplace, it’s essential to motivate people and urge them to use your products and services. One way to motivate potential customers – and keep existing ones – is to launch a customer incentive program. The key is to spend enough on the program to make it worth your while. Therefore, you should gauge your spending based on customer reach, cost of implementation, rewards given, and increased revenue stream.
Not sure if you’re ready to offer a customer incentive program?
Here are some tips and suggestions to help you decide whether this method of increasing loyalty and gaining new customers is an appropriate move for your business.
To ensure business growth, allot plenty of funds for customer incentive programs.
Why Fund Customer Incentive Programs?
Customer incentive programs offer top value for your customers and reward them for being loyal to your company. This can be important for any type of business, large or small. There is plenty of competition out there, so giving consumers a reason to spend their money at your store, rather than with someone else, is one key to maintaining profitable growth. Customer loyalty means you’re translating their return trips into cold, hard cash.
The old adage, “You have to spend money to make money,” is true. To make more money, you need to spend an adequate amount on attracting people to buy whatever you’re producing. That means making sure you include a customer incentive program in your budget – even if the program is a smaller one, to start out.
To encourage membership in a customer incentive program, offer a free item just for joining. An example would be a free dessert for patrons who join a restaurant’s new program. You could also offer a guaranteed discount for new members of your incentive program.
The bottom line is this: Bring new or existing customers into the fold by dangling a carrot that will prove attractive to them. Give them a reason to join your program, then keep them coming back for more and better incentives.
Types of Programs that Offer Bang for Your Buck
There are many customer incentive programs you could implement, depending on what you feel fits with your company profile. Some companies allow customers a free item after accumulating a certain number of points, while others offer a discount percentage on purchases after they’ve reached a particular threshold. The key is to make your points program simple and easy to understand. A points program will usually offer a steady return on investment (ROI) without having to spend an exorbitant amount for implementation.
Reward clubs are popular with consumers, such as those found at grocery stores, pharmacies, and other retailers. With a reward club card, consumers receive discounts for each purchase. The benefits to your business include being able to track purchases and target customers when it comes to developing advertising campaigns. Spending money to get a reward card program up and running can easily be offset by the savings you collect in advertising dollars that translate into increased sales.
Incentive programs can further be divided into the level of customer engagement. Tier-level rewards are tied to spending levels. The more a consumer spends, the more rewards he or she has access to. For example, high-spending customers can join an exclusive purchaser incentive program once they spend over a certain limit. These VIP rewards, which are not available to everyone and offer more exotic perks, may be a good way to draw in those who have more disposable income and are willing to spend more of it with your company – for the right perks, of course.
Finally, one way to increase your ROI without increasing your spending is to partner with other companies or organizations. By sharing the program and offering incentives for customers in tandem, your business can reap rewards and increase customer loyalty.
Plus, there is a crossover effect. If a person who is familiar with another company, but isn’t familiar with your company joins the program, you may gain a new purchaser in the process. Then you can work on making them a satisfied customer who will come back to you for repeat business.
If you must trim your company’s budget, don’t abandon incentive programs.
Regardless of the customer incentive program you decide to choose, your investment in such a program could pay off handsomely. Customers will tell others about their experiences, positive or negative, so it’s in your company’s best interest to motivate customers and reward them with meaningful incentives.
Contributor: Bev Sninchak is a veteran freelance writer with 16 years of experience producing content for various publications. She researches and writes about many subjects, from how to evaluate Reputation.com reviews to successfully marketing your blog.