Customer reward programs should focus on brand, customer value, simplicity
From slowed parts production and raw material shortages to job market woes, hot tub customers are experiencing an increase in lead times.
Jennifer Gannon, proprietor at BonaVista LeisureScapes in Ontario, Canada, says customers “are finding out the supply chain is sort of deeply altered for all retailers.”
With this waiting game, retailers are relying on a variety of marketing techniques to keep both new and existing customers patient and engaged, including revamping or creating new customer incentive programs that reward customers for leaving reviews and purchasing after-market items like chemicals or other products dealers offer.
Tempting new and returning customers with discounts can increase loyalty. Not everyone is fully convinced, however: David Isaacs, owner of Isaacs Pools & Spas in Johnson City, Tennessee, says loyalty and incentive programs can create a discount structure that can negatively impact the bottom line. He urges companies “to be thoughtful when calculating the levels of discounts to be given.”
Kobie Marketing, a loyalty marketing company with offices in Florida and Texas, writes in a November 2019 article entitled “Get Rewarded for Thinking Beyond Points,” that the value of a rewards program should be about more than just prices. Retailers should also consider membership, status, exclusive content and/or a personalized experience.
Danielle Lavallee Wasson, former international sales director for Bullfrog Spas and now an executive and leadership coach, summarizes creating a successful incentive program into five main steps:
Decide and define the desired outcomes, whether that be new customers, higher sales and/or increased customer retention.
Structure the program so it is simple and easy for your company to maintain and valuable to customers.
Create a marketing campaign to increase knowledge of the program.
Train staff on how and when the program will be implemented.
Give it time to work, and evaluate the effects.
Loyalty and incentive programs need to be easy and valuable, Lavallee Wasson says, or companies risk discouraging customers rather than increasing sales.
“If the customer can’t understand the program, it then becomes [perceived as] a scam and the retailer will lose customers,” she says.
To effectively communicate the program to customers, the Kobie Marketing article also suggests coming up with a loyalty program that conveys its value and your brand in its name.
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Once a clever program name is chosen, perks should keep the customer experience “easy, meaningful and relevant,” the article says. Personalized rewards and customer-driven discounts on products they choose is one way to do this.
BonaVista LeisureScapes has found a structure that works by offering an in-store product discount for customer reviews.
“We’ll invite [customers] to review us, and then we set up a credit on account for them,” Gannon says. “It’s an opportunity for them to share their feedback, and by the same token, we give them [a discount] in store in exchange for their feedback.”
Two Men and a Spa Dolly in Arnold, Missouri, uses a simple and mutually beneficial reward program. “We are participating in the coffee cup/cookie promotion to encourage customers to leave a review, preferably good, but to get in front of issues if unsatisfactory,” says Nichole Larmie, website and social media administrator for the company. Customers receive one of these small items for providing feedback.
Reward program simplicity also means having an account that the retailer maintains rather than the antiquated punch card programs many have used in the past, says Lavallee Wasson.
“If the customer has to carry a card of some sort, that is way old school and probably won’t work,” she says, noting that “data management [for the program] is critical and must be easy.”
Isaacs admits his company’s previous punch-card system was “simple, but a little antiquated,” and that most customers forget they have it or forget to bring it in. Because loyalty and incentive programs should be designed with brand awareness in mind, a punch card can be a self-defeating strategy.
Isaacs Pool & Spa has partnered with SCP’s Splash Cash program to provide customers with earned incentives. Isaacs says it was easy to get the program started in a short amount of time.
While Isaacs notes customer loyalty and incentive programs can be complicated and difficult to implement, he says good programs are worth the investment so your company stays top of mind.