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Article Loyalty Strategy

Rewarding More Than Just Revenue

 

A lot of new tools (especially mobile ones) offer the ability to reward more than just sales. You can reward things like social shares, walk-ins and other things that help your marketing efforts.


How should you go about deciding whether to pursue them?

 

A lot of companies that offer those solutions will tell you not to over think it and just give it try. Experience tells me that’s the wrong approach for a few reasons:

  1. Even a services is very low cost, there’s always an internal resource demand either initially or when the programs starts running.
  2. How will you know whether you’re hitting your goals if you didn’t have any specific goals in the first place?


You’re constantly innundated with new options for customer facing programs.

The temptation is to just go for it and get started on something. But what’s next? What happens when the next cool idea comes along and your colleagues are questioning the one you chose?

There’s only one way to create some structure and sense of control in the new business world we operate in. There may be 100s of different programs, tools and service available to you but in the end your business has one stable thing: your business model.


It's all about your business model

Ultimately, each of these programs fits into your business model somewhere — or that’s the intention — so choosing between them is centered around which parts of your business model need the most help.  That’s the key question to ask about any customer facing program? Where does this impact my business model? How does it affect costs vs impact (ROI) in different key functions like marketing and sales.

Take for example rewarding customers for walk-ins.  If you’re a speciality clothing store and you want your customers to visit once a month to see the latest items you’re carrying, then offering a reward for just visiting makes sense.


But what about the economics?

How big a reward to you give them just for visiting? The right way to think of this is to see it as a replacement for part of your marketing spend. (I’m not saying you have to cut your spend somewhere else, but instead deploy a annual growth in your marketing budget here instead of growing your existing programs).

If you have some metrics around your marketing ROI, you would have some sense of how much you have to spend to get foot traffic to your store. If you’re not thrilled with the quality or quantity of foot-fall you’re getting, then looking at another option (like a reward for walk-ins) makes sense.

It also gives you a purpose for the new rewards and a benchmark for measuring ROI against.


This appoach applies everywhere

Ultimately, this approach is required with any programs you undertake in your company — especially customer facing ones.

Understanding your business model and all it’s key points of success/failure is key to choosing the right programs from a sea of options.

Aug 23, 2013  
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