As someone who makes a living selling and managing reward and loyalty programs, their many uses and benefits are ingrained on my way of thinking – but I often have to remind myself that this is not the case for the majority of the people I encounter in my professional travels.

For most people, their experience with a reward program is limited to their personal participation in a frequent flyer program or a “loyalty” program offered by their grocer, pharmacy or gas station. They may or not be very engaged by the program(s) in question; the program may or may not be well run and 99 times out of 100, the participant is oblivious to the various reasons the merchant offers the reward program in the first place. They look at the program from the perspective of what they get out of it – not what the merchant gets out of it – and so when I come knocking, the average person is unable (or unwilling) to appreciate how their business might use a reward/loyalty program.

To put it in perspective, I’d simply like to state that ANY company that deals with ANY of the following activities/results/issues can and should be using a reward program as part of its daily operations:

  • Sell a product or service
  • Have competitors
  • Spend money on advertising or any other form of marketing
  • Offer discounts/don’t want to
  • Introduce new products or services
  • Wish to motivate in-house sales team
  • Wish to motivate sales people who sell their products at their points of distribution
  • Wish to educate sales people about new products/services so they can sell even more
  • Like to be paid on time
  • Want to keep existing customers
  • Want to attract new customers
  • Want to sell more products/services to existing customers
  • Want to increase average transaction sizes
  • Want to increase incidence of selling higher margin items
  • Want to sell product bundles
  • Want to increase the # of product categories sold to the average customer
  • Want to understand the sales impact/ROI of a $1 spent on marketing

Each and every one of the above items can be influenced using a well-structured and professionally administered customer reward program; the problem is most people have never created and/or operated a reward program so they don’t appreciate how flexible and results-oriented they can be and they really don’t know how to operate the program to obtain the desired results.

I will often tell a prospective client to create a list of their top 10 corporate objectives so we can begin the process of structuring the design and focus of the reward program appropriately – and then we structure offer values designed to impact the desired target audience(S) behavior and administer the program so it is top of mind and does its job(s).

What can your business use a reward program for? Almost anything.

But it’s how you design, structure and operate the program that matters most.

A reward program is a performance-based sales & marketing tool; used correctly it works well; used improperly or for the wrong task, it doesn’t.

By Graham Farrell – President, Lift & Shift Loyalty Programs