Many of QIC’s channel sales and customer incentive programs are business-to-business (B2B) rather than business-to-consumer (B2C). Both types provide insight, however and recently I was intrigued by two B2C items that came to my attention:

Loyalty Programs Don’t Drive Loyalty; Customer Experience Does – by David Jacques, Customer input

The Loyal Treatment, Maximizing Customer Value Through Engagement – by Dennis Armbruster, Loyalty One.

Both of these publications cite statistics about B2C loyalty program usage that I found interesting:

. . . only 45% of customers enroll in loyalty programs and only 35% of them redeem awards. This means about only 16% of the customer base is actually using the loyalty programs. (Customer input).

 The fact is, companies on their own often lack the ability to provide enough value in currency alone resulting in unused benefit and limited shifts in consumer behavior (Loyalty One).

The authors used these statistics to make the case that points-based incentive programs don’t singularly impact metrics like customer retention, customer engagement and revenue. Rather, they say that it’s more important to provide a robust product or service value proposition and a compelling customer experience.

We agree with that point of view. Points-based loyalty or incentive programs will have limited impact if your business does not have a compelling “reason for being.” On the other hand, if your products or services deliver real value to your customers (as we hope they do), a points-based program is an excellent way to get those customers to pay attention to that value. As we say in our web site section on Customer Incentive Programs:

Points-based incentive programs not only offer a “do this, get that” incentive to your customers; they also create a more captive audience for your key messages. With something to gain, your customer now has a vested interest in paying attention to your news and updates. We like to call customer incentive programs “communications campaigns with teeth.”

We can help you determine the best way and time to use points-based incentive programs to reinforce your company’s distinctive competency to your customer base. Contact us here or give us a call.