Monthly Archives: January 2009

reward programs and quick fixes

With the new year many businesses are considering ways to improve their profitability. Reward Programs of all types are among the most effective ways to do so both in terms of cost and results. Many businesses will look at implementing them for the first time and a large portion will be expecting immediate results. The belief that simply implementing a program will result in success is a common one that leads to many abandoned efforts. Because of this belief a majority of businesses implement a program and sit back expecting results without any further tuning or promotion.
A successful Reward Program may not be an instant fix but neither does it require a lot of work. All it needs is some promotion and monitoring. From our experience with businesses we have identified 5 simple things that a business can do to make their program a success:

1. Define

A Reward Program does not have to be complex but is most effective if you have a clear idea of what you are trying to achieve: is it to increase awareness of your brand, compile a mailing list, get your brand on the street, encourage the sale of more profitable items? Or is it all those and more?

Knowing what you are trying to achieve with your program will help you decide the following:

  • which type of program to install (a simple stamped crd or more complex information gathering system)
  • where and how to assign points ( per transaction or per profitability of the product)
  • whether to use someone else brand or your own

2. Simplify

It is possible to come up with complex points and reward schemes that graduate the reward people get according to every action. This will confuse both you and your customer, and while there is nothing wrong with special offers to promote specific products (such as 50% more points on a specific day or bottle of wine) the general rule, as with most things, is Keep It Simple.

3. Communicate

You cannot expect a customer to see the cards you provide, or to understand what you are offering them without explanation. Communication about the program is essential. The simplest and most effective way is to have your staff ask every customer if they have a card and offer to provide them with one if they don’t – while also explaining how it works. The next most important action is to provide some information on the program along with the card – a simple A3 sheet or brochure gives the customer something to read and allows them to see what is in the program for them without feeling like a fool by asking staff again.

4. Repeat

As the most successful users of Loyalty Programs have discovered, repetition is important. You and your staff must ask every customer if they have a card – and do so for every transaction. This will create awareness – leading to a higher uptake on the cards themselves – and will also ensure that regular customers use the cards rather than leaving them in their wallets. Not everyone is comfortable asking for points, especially on low value transactions, and the fact you offer the points is welcomed by the customer.

5. Review

Situations change and if they do your program needs to change along with them. A review of your program and how it operates should be an important part of your business review, especially in the early days when you need to tweak the points system. But even when you have a system you are happy with you should review it on a regular basis to ensure it is working as you want and achieving what you need. This will include reviewing customer usage, points, and if staff are still asking customers if they have a card.

A review does not have to be a lengthy process and twice a year is more than enough.

These are simple steps but following them can dramatically improve the performance of any Reward Program.