Jun
20

Consumer incentive programs: what to consider before you pick a retail partner

posted on June 20th 2017 in Best Practices & Customer loyalty programs with 146 Comments

consumer incentive programs

Consumer incentive programs can be a highly effective means of driving business growth, but to make them work you must first do thorough research. There is a lot to consider, but starting with why you want to run a consumer incentive program is always the best point.  

The ‘Why’ of consumer incentive programs

Consumer incentive programs must be able to generate bottom line results. Growth, however can be obtained in various ways. Here are four of the most common reasons why your business may want to create an incentive program:

  1. Drive revenue in quiet months. It happens to most businesses every year. There’s a quiet time where sales take a dive, customers are hard to reach and prospects harder to convert. Having a strong value-based incentive program can help your business drive  more linear revenue growth.
  2. Competition is fierce. Almost every industry is in a tough place when it comes to competitive offers. Having an incentive program which prospects and customers find rewarding can make the decision to go with your brand that much easier.
  3. Market share growth. If your competitors are closing in on your client base, or you’ve already lost a share of the market that you shouldn’t have lost, an incentive program could help your brand establish stickier relationships with customers. Research by Bain & Company shows that a 5% increase in customer retention can lead to an overall increase in customer lifetime value.
  4. You’re launching a new product. Most product launches happen with incentives. Like the cash-back offers when you’re looking to buy a new car, creating a compelling incentive can make your new product more appealing than your competitors’.

Whatever your business goals and reasons for an incentive program, we recommend that you select just one goal, document it and get serious about it. According to the Harvard Business Review, almost three-quarters of large organisations experience difficulty implementing strategies, so focusing on one goal allows for a single, laser-like approach to execution.

Research your target audience

Research is a vital part of developing an effective consumer incentive program. It’s where you get to dig deeper and find the most valuable elements that become part of your program design.

At this stage, you are looking to learn more about the desired business goal. You’re breaking it down and understanding what elements will go into achieving it. You’re exploring how results will be generated, what they’ll look like and which segment of your customer base will be responsible for the results.

You’re also digging deeper into important aspects about your target audience. You’ll need to figure out:

  • Who and where they are
  • What they currently buy from you and what else they might want to buy from you
  • Why they buy from you or your competitor(s)
  • What their interests are (related to your product or service directly and indirectly)
  • What they consider a valuable reward and how much that will cost your company

As you piece this information together, you’ll begin to create personas that can be used as part of your marketing campaign when you launch your new program.

Finding the right retail partner

While the goal is to partner with the right retailer and see success with your consumer incentive program, creating a partnership with the wrong retailer is still within the realm of possibility. The results of an unfortunate partnership could leave your customers unhappy with your program and more likely to jump ship for a more competitive product with a more attractive incentive program to boot.

This is where research into your target audience becomes invaluable. Understanding your target audience will help you find a retailer that is a perfect fit for your program.

The retailer should be able to meet the following minimum requirements:

  • Offer products/services that are desired by your target audience. The retailer should be able to meet the volume and frequency required by your customers.
  • Be located close to or be able to easily deliver products/services to your target audience. Ease of access to rewards of the incentive program is an important factor. If your audience experiences any difficulty in accessing their rewards, you risk damaging your brand’s reputation.

Other considerations worth exploring:

  • Discount offers that can be passed over to your unique target audience
  • Co-branding opportunities

While the considerations above are related to the mechanics of your partnership, we also have a list of best practices to make the partner experience a more pleasurable one:

  1. Aim for transparency. Partnerships work best when both parties have a very clear understanding of the end goal. Sharing all the necessary information with your new retail partner will help set the tone for a much more productive and effective relationship.
  2. Set communication standards. Establish how communications will take place, especially when handling issues that could lead to confusion or misunderstandings. A simple yet effective rule of thumb is to make a phone call for anything that takes more than three emails to explain.
  3. Be clear on how to handle problems that may arise. This should include having access to a support team employed by the retailer that can resolve issues swiftly for you and your customers.
  4. Mitigate the risk of a single point of failure. While having a support team in store or on the phone may be useful, sometimes information doesn’t get passed among staff members as efficiently as possible. When you establish your relationship, insist that there be at least two people who understand and have documented the details of the partnerships, especially if there are any unique elements that need to be known, such as extra discounts or bonuses for your customers who exhibit a certain behaviour. Having two people to turn to lowers the possibility of any frustrating experiences, or lack of support should one party be unreachable.

Conclusion

While finding the right retail partner for your consumer incentive program depends on your target audience and what rewards they deem valuable. Establishing a relationship with a retailer that can deliver on its promises is equally important. Make sure your partnership adds value to your business and the lives of your customers.

Looking for the ideal retail partner?

We can help pair you with the perfect retailer for your next consumer incentive program. Call us on 021 812 1495/6.

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