The Right Way to Use Incentives for Better Customer Relationships

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Offering customer incentives can be a great way to build stronger relationships with your customers. Customers are clearly interested in them as well, because the average household is subscribed to 25 different customer loyalty programs. This means that there are over three billion customer loyalty subscriptions around the country.

Unfortunately, many brands make a series of mistakes with customer incentives, so they have difficulty building stronger customer relationships. Here are some tips to run a more effective loyalty program that actually builds stronger relationships with customers.

Look Beyond Offering Customer Discounts

The vast majority of customer loyalty programs focus on offering discounts. Patrick Leddy, the CEO of Pulsate, states that this is a big mistake.



“The main problem with mobile loyalty programs is that they’re mainly forced price discounting programs. Are you really going to pay the full price when the plastic card offers you a discount? Probably not, but just by paying with the card and getting a discount it doesn’t really create loyalty. It doesn’t create any loyalty between you and the company.”

The problem with focusing on discounts is that other companies operating on larger profit margins can easily offer better promotions. Royal Carribbean has been called out by The Street for offering worse incentives than competitors like Oceania.

“That said, Select and Elite members just recently received Internet and laundry privileges that colleagues on cruise lines like Princess have had for a while. While behind-the-scenes tours and increased access is nice and all, it looks flimsy when compared to the $75 to $400 credits that customers receive on competing lines like Oceania.”

They would be better off offering customers a chance to earn a luxury vacation or something instead.

Make Your Customer Loyalty Program Easy to Navigate

Companies often make customers go through a number of hurdles before they can earn their loyalty benefits. This defeats the entire point of the program, which is to build customer loyalty.

Customers will constantly feel left down and even cheated if you make the process too difficult. Make the process as straightforward and easily attainable as possible, so customers feel engaged and keep coming back for more.

Be Consistent

Cutting the benefits of your customer loyalty program is a big mistake. Subway discovered this the hard way. They used to offer a very generous loyalty program, but discovered too many people were cheating the system. Instead of eliminating the fraud, they simply cut back on the loyalty benefits customers could earn.

It’s much better to offer consist rewards.

Make it Easy to Discover

You need to make sure your customer service loyalty program is as easy to find as possible. It is always a good idea to invest in the right SEO tools and make sure your customer loyalty page is properly optimized for the search engines.

Always Deliver on Customer Expectations

Your customer loyalty programs need to outline expectations very clearly. Customers will be very displeased if you fail to live up to your terms, especially if you violate your contract agreement and face regulatory penalties.

Your customer loyalty program must be consistent with and complement other elements of your marketing strategy. If your marketing message centers around affordability over premium services, your loyalty program should provide more generous discounts to your members. If you focus primarily on providing top-tier solutions, your loyalty program should give members access to features not available to non-subscribers.



Avoid Tacky Incentives

Years ago, a major health insurance company offered gym bags, sweatshirts and other irrelevant products to customers that subscribed to their healthy living program. This did very little to incentive most customers, so they eventually stopped offering those products to members of that program and began offering cheaper premiums instead.

Many companies make similar mistakes today. They often offer free pens and other random accessories that don’t complement the company’s branding message or align with customer needs.

Royalty free image by Pexels

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