Consider a risk management plan
Firstly, communicate schemes to your customers clearly, simply and upfront; consumers should know why it is that they are being rewarded and how they can obtain their prize they shouldnt have to search through an extensive “Terms and Conditions apply” blurb thats set to catch them out.
Install promotional risk management mechanics that will help stop the entire world catching onto the scheme straight away and then take advantage of the companys generosity. This can be achieved by limiting the advertising of the promotion, or tailoring it so only your current customer base can view the reward scheme in place, such as through a consumer mailing list.
Brands can also look into building in a redemption stage that relies on purchase, or simply only doing the promotions on specific days at specific times.
Ensure programmes are carefully targeted
Both new and existing customer bases should be taken into account when considering a reward scheme.
Some programmes suffer in the basic “compensation” approach to loyalty, which may be with good intentions motivated by a pure desire to say thank you, but every promotion or programme has the potential to alienate the most loyal customer if their needs and values arent targeted and carefully considered.
When it comes to which industry does it best, supermarkets are leading the way in rewarding customer loyalty, with our research revealing more than half of us are part of these types of schemes and are reaping the benefits.
However, insurance companies are missing a trick by failing to capitalise on loyalty schemes to retain customers, with the vast majority of consumers (90 per cent) unaware of whether their supplier even offers an incentive scheme.
The loyalty scheme in place should firstly satisfy the customers that regularly flock to your doors, before reaching out to entice a whole new wave of potential consumers that may or may not stick around.
By carefully targeting a scheme at the planning stages brands can ensure that they won’t be left firefighting as a result of creating a programme which may not meet the original objective.
Ian Horsham is divisional director for promotions and incentives at The Grass Roots Group.