Having quality products and offering great customer service isn’t always enough to push customers to make repeat purchases. Sometimes, a little extra incentive or motivation helps.
Few things are more motivating for customers than the ability to turn their brand loyalty into tangible rewards, like gift cards, free services, or future discounts. A customer incentive programme shows customers just how much you appreciate their continuous engagement — the right programme can also ensure your business a sustainable recurring revenue stream.
To get the most value from the customer incentives you provide, you need the right strategies in place.
The science behind loyalty programmes
While you may think that customer loyalty programmes are hit or miss for brands, there’s proven science behind their effectiveness:
Feelings of reciprocity
Most humans are naturally driven to return a favor when one is given to them. This can be a powerful motivator for customers when the brands they engage with offer them free gifts or exclusive discounts.
By leveraging this ‘give-and-take’ mindset, your business can provide small gifts to customers while boosting the likelihood of seeing repeat purchases, increased positive business reviews, or referrals.
Reinforcement of certain buying habits
You’ve likely heard the term ‘positive reinforcement’ used in reference to clinical therapy settings. There’s a good reason for this — it really works!
When someone is regularly rewarded for carrying out specific actions, their brain associates these behaviours with something favorable and worth repeating. For businesses, rewards and incentives are great tactics to motivate customers around certain buying habits.
For example, if a customer leaves great feedback and you respond with a small token of appreciation, they’re much more likely to share their thoughts in the future.
Creating an emotional connection
For businesses to build authentic, long term relationships, customers need to feel like they’re more valuable than a simple business transaction. Providing free rewards or incentives is a great way to show them you’re not just concerned with your business’s bottom line.
The more a customer feels like a priority to your business, the less likely they are to explore other brands.
Practical strategies for implementing effective customer incentive programmes
Start with clear business objectives
To make sure your customer incentive programme brings your business the most value, take the time to identify key goals.
For example, you might be most interested in expanding your leads or increasing your recurring revenue. Depending on your needs, you may want to offer rewards for customers that provide referrals to your business or make repeat purchases.
Whatever your business objectives are, by defining them first, you’ll be in a better position to create a loyalty programme that helps you achieve them.
Get to know your customers
An important element to make your incentive program successful is knowing exactly what motivates your customers. If you assume all customers are motivated by discounts or a free gift card, you may find that actual customer needs will vary over time.
Instead of making assumptions, create an even stronger relationship with your customers by asking them directly about which types of rewards they might prefer. This can be a great way to show them you value their perspectives, while improving your program results.
Make the programme easy to understand
Once you’ve decided on the best format for your programme, be sure to communicate effectively about the programme to your customers.
Send them an email with detailed information about how the scheme works, and be clear on ways they can participate. The easier it is for your customers to understand the programme, the more involvement you’re likely to get.
Track your success over time
Everyone’s preferences change over time, and your customers are no different. After you’ve created your own incentive programme, carefully monitor its success over time to determine return on investment (ROI) among other things.
You may find areas where you can improve participation rates, such as offering different incentives at regular intervals or adding additional ways for customers to become eligible for rewards.
Build a long term customer base
Incentive programmes are a great way to reward your customers for their continuous support of your brand. By following these strategies, you’ll be able to build even stronger relationships with your customers while supporting long-term business growth.