AFHood Group Blog The thoughtless yammerings of marketing junkies..

5 Ways to Improve your Loyalty / Incentive Program in 2010

As we go about Christmas shopping this year, I can't help but notice the failed execution of various loyalty / incentive / rewards marketing programs. So in the spirit of giving, we offer 5 ways to improve your program in 2010.

1. Recognize your best customers! This is what loyalty programs are all about.
   1. Identify your best customers. Find out who they are and what they look like (from a transactional, financial, and preference standpoint).
   2. Understand why they prefer your products or services. What makes you different from all of their other choices. This is key! Make sure you protect this competitive advantage.
   3. Reward them! Most customers enjoy discounts and sales. However, this is not the best way to recognize your best customers. Recognize them, honor them, treat them special.
2. Do not punish your customers that prefer not to belong to your program. All too often organizations make such a big deal about their program that those who choose not to participate feel pressured, annoyed, and unwelcome. The flip side is, sales people will go out of their way to bypass the system if not belonging to the program makes customers feel uncomfortable (eg. sales clerks will use their rewards code for customers who don't have one).
3. Be clear on the activities you are rewarding. Consumers want to know before they join if this is going to be worthwhile. Let them know what they must do to get rewarded.
4. Be clear on your rewards! Let the customer know how this benefits them. What are their choices? How are you going to recognize them?
5. Drive consistent execution of communication and recognition. All it takes is one poorly managed customer interaction to ruin the relationship you've built with a customer. Little is more important than delivering on the benefits you've communicated.

Now, we know that we could have labeled this post 'Rewards programs 101', but lets face it, running successful rewards programs isn't about innovation, technology, or some mystical customer understanding. Successful programs are the ones that execute the basics flawlessly. 'Blocking and tackling' a wise man once said. Do the basics well and win you will.

We hope everyone has a successful 2010!

MMX (2010)