Power of Perks...Going Beyond Spiffs & Points

How do you differentiate your reward program?

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The component that many brands focus on within their reward program is the spiff. Competing against competitor reward programs can be a costly battle. An impressive spiff amount can certainly make a splash. It will generate a lot of buzz. That buzz will certainly have an effect and units will move. It will also have an impact on your reward budget. That can be a strategy when you are looking to move inventory and gain marketshare within a specific channel partner.

Beyond raising spiff amounts, what else can you do to get your program noticed and increase loyalty?

Perks! Perks should be added to the reward mix in a strategic way. What are perks?

If you travel often, you may have an airline that you fly frequently. The more you fly them, the more miles you accumulate. Those miles not only earn you free flights, they provide you perks. The ability to move up boarding groups or be placed on the waiting list for an upgrade sooner. Those are perks offered by the airline to reward you for your loyalty.

Retailers are adding perks to their most loyal shoppers. These perks include early access to special promotions, invitations to special events, early access to product launches, free shipping or personal shoppers. Macy’s gets half its $24.8 billion in annual revenue from 10% of its customers. Nordstrom says loyalty members spend four times more than nonmembers.

In channel programs, the 80/20 rule also applies. How do you focus on your most loyal partners? How do you share shift within your other partners to increase their sales?

Perks can be used in a strategic way when applied to a channel incentive program. This goes beyond points and dollars. It’s another layer added on your program. Karrot can assist you in analyzing your program and developing a strategic approach mirroring your culture and your goals.

Mild, Medium & Hot

Today Chipotle announced a loyalty program.  Previous business set backs namely E. coli, norovirus and salmonella has hit them hard. It drove their sales down and now they are turning to a loyalty program to increase traffic. How are they encouraging additional business and traffic to their stores? With a month to month loyalty program. They have structured their program with 3 levels. The more engaged the bigger the reward.

  • Mild - 4 visits in a month earns you a free burrito, bowl, salad or tacos

  • Medium - 8 visits in a month triggers another free entree

  • Hot - 11 visits in a month, you'll earn another free entree

If you maintain your status throughout summer, you'll earn a big reward at the end. Hot status each of the three months earns you catering for 20 people!

This is a structure aimed at encouraging consumers to make frequent visits. Communication and the ability for individuals to track their status is key! At any time, individuals need to determine where they are and what they need to do to reach their reward. If they are 1 or 2 visits away from attaining a tier, they should be notified. A mobile app comes in handy with pop up notification.

Engage individuals to drive behavior. 

What can you learn from the disastrous launch of Starbucks Rewards’ program re-design?

What can you learn from the disastrous launch of  Starbucks Rewards’ program re-design?

Imagine all the time and money that Starbucks' employees spent on the re-design of their new rewards program! 

It had to be hundreds of hours, maybe more than a thousand hours in total when all was said and done

There are plenty of lessons to be learned here...