It seemed like a good idea at the time. Bribe prospects to give you a try with a special incentive, wow them with your amazing customer service and voila, you have expanded your customer base! Only there is one teeny tiny problem with your plan: the customers who you wooed to wow were really only in it for the bribe and like all fair weather fans, as soon as the incentive is gone, so are they.
And what about the loyal customers? The ones who have been with you for years? Aren’t they the ones who deserve special treatment? Because that’s exactly what they are thinking when they see you doling out rewards to new customers who will abandon you for the next incentive. Not only have you invested in the wrong customer, but you sent a negative signal to the group that deserves the reward.
How to Use Incentives to Train Customer Behavior
#1: Reward What You Want — Think about what you want from your customers and design a bonus system that rewards that behavior. For example, if you want customers to pay their bills early, give them a percentage off for doing so or if you want them to refer new customers, send them a special “Thank you” gift. The key is letting them know what you want them to do and what they get in return.
#2: Connect It to Loyalty — Design your rewards system to reward loyalty, not longevity. Often companies confuse longevity with loyalty when the one doesn’t necessarily mean the other. Identify key traits of loyal customers, which may include longevity, but also behaviors like referring friends and family, participating in customer surveys, and being the first to try new products or services.
#3: Offer Random Rewards — Mix in a little randomness to keep your customers guessing. Break out the popcorn and cotton candy at your retail location “just because it’s Wednesday” or hold a surprise Facebook giveaway contest that lasts only 17 minutes. Get creative with how you deliver the special treatment to your customers.
#4: Empower Your People — Train your people on how to reward valuable customers. It doesn’t need to be over-the-top or anything — this is where the little things mean a lot. If you ask my stepdad, he will still tell you about the day he got a movie rental FOR FREE from the local video store courtesy of one super helpful employee.
#5: Be Consistent — Whatever you do, be consistent. If every year you send a special birthday bonus, never EVER stop. Customers remember stuff like that and feel betrayed when they miss out on the special treatment. Replace rewards programs with caution and only if your new program outshines the old one because you can guarantee there’s going to be someone who misses it.
2 Comments
I love this Carla. I did a post a few months ago where I stressed the importance of also KNOWING your customer before rewarding them. I used the example that Directv is always trying to “reward” me with free PPV as a thank you. But I’ve never ordered a PPV.. so why would I consider that to be a reward?? They’re all trying.. we can give them that.
truth, truth & more truth! At Mabel’s Labels we know our bread & butter is with our loyal, return customers. They feel the love and bring us their friends through positive word of mouth. Our customers are royalty. If we do perk new, or a segment of customers, we’re careful to even things out, in the end. Know where your bread is buttered!