Last week I wrote about the value of tailoring your incentives programs to strike the best possible balance between meeting your business goals, the needs of your channel partners and providing a great experience for your consumers and partner sales associates. Custom culture is still going strong in many consumer goods sectors and I continue to be inspired by how many clients I see picking up the challenge and tailoring their programs to build ever greater engagement with the channel.
This week, I'm going to dig a little deeper on this important idea around customization and look at the value of offering flexible rewards and payment options.
While most people you talk to would tell you that they're always happy to receive a check in the mail, today we're going to look at how offering some other options can give you an upturn in engagement with both consumers and your most valued partners. Adding additional points of leverage into existing strategies is a great reason to have a closer look but another great reason is when you consider the reduction in expense most businesses will enjoy by radically reducing the number of paper checks they issue each year.
The Real Effect of Virtual Rewards Cards
Instant gratification has traditionally gotten a bit of a bad rap but the fact remains: nothing brings satisfaction to a rewards program quite like instant payment.
Consider the social mechanics of an incentive; you (on behalf of your company) and the party being rewarded agree that if they undertake a certain behavior, they can expect a reward from you. It's a simple fact that the sooner a reward comes after the desired behavior, the easier it is for the brain to associate the behavior with that reward – this is reason enough to look closer at this payment method. By the time an incentive claim is entered for approval, the other party has taken the desired action and the promised incentive can't possibly arrive soon enough. With a virtual card, payees can receive their reward via email, in real time, as soon as the claim has been approved. But there's more.
Whether you're running a sales incentive program or a consumer rebate program, at the end of the day we are all consumers. As I write this, being a consumer means that a person is just as likely to be buying goods from the Internet or paying for purchases using a mobile application as they are to be stopping for a carton of milk on their way home from work. These shopping and payment habits, while still somewhat novel, are increasingly becoming normal buying behaviors.
Think of a virtual payment card as a way to offer your consumers or retail sales associates (RSAs) the ultimate in reward flexibility – they can immediately use the money to buy goods from an online retailer, top up the Starbucks payment application on their phone or electronically transfer the funds directly to their bank account. Consider the enhanced engagement with an RSA who thinks of your brand every time they treat themselves at Starbucks using funds from their virtual rewards card.
Open Your Program to Closed Loop Cards
Have you been looking for strategies to improve connectivity with key retail partners? Co-branded incentives programs are a fantastic way to help you build and strengthen these strategic connections.
A great application of this approach is to offer a tiered payment approach in a consumer rebate program where instead of a single reward option, the consumer is offered a choice of rewards. The first tiered amount can be loaded to an open payment card, such as a virtual card or prepaid branded credit card. Alternatively, the consumer can elect to receive a higher reward amount paid out on a closed loop card, such as a gift card co-branded with and for exclusive use at the retail partner's stores.
In this case, the cost of providing the higher value card can be shared with the partner but the value is felt by all parties: you are working hand in hand with strategic partners, they are benefitting from a program that invites customers to shop more and the consumers are enjoying flexible rewards. Again, the strategy is made even better by the fact that you are honoring your consumer by offering them the additional perk of choosing their own rewards.
Is this the best part? You will need to decide for yourself what is most important to your enterprise and its needs of course, but having consumers opt-in to receiving future marketing messages from your company gives you a powerful point of leverage. It's up to you what you do from there.
A test project we ran for a company in early 2015 saw an 80% opt-in rate by consumers who were asked during their rebate redemption process if they would agree to receive future marketing information from the company. Interestingly, this opt-in rate is more than four times higher than the opt-in rate they were experiencing on their own website.
You can reinforce this behavior within your own program by running a few experiments. In the above example, the option to opt-in was simply part of the rebate redemption workflow. We assume that people were simply more open to opting in because they were enjoying the experience of a simple claim process and they knew that they would soon be receiving their reward – definitely the right time to be asking them for a small favor.
Perhaps you could offer slightly greater rewards to get an even higher opt-in rate, or combine tactics by allowing the consumers to unlock a higher value closed card if they opt-in to your partner's loyalty program? The permutations are limited only by your imagination and whatever tools you are using to manage your incentives programs.
If your company runs consumer rebate programs and you are looking to make some upgrades, please feel free to check out our e-book Leveraging The Consumer Rebate. It contains plenty of actionable suggestions to build points of leverage into your rebate programs while building greater engagement with the people who buy your brand using tools you likely already have right in front of you.
A lifelong technology entrepreneur, Jason Atkins is the founder and CEO of 360insights. 360insights is the world's first Channel Success Platform, allowing brands to run spiffs, rebates, co-op/MDF, and sell-through allowances all processed and paid with 100% audit and powerful analytics to predict what to do next. For more information, visit: http://www.360insights.com.