Points Incentive Programs: Sticking with what works

There’s a reason points programs are popular

Think about your routine on any given day: You might go to work, get an oil change, hit the gym and take in a movie. By the time you go to bed, you’re likely to have racked up a tidy sum of points for your engagement and patronage with various entities over the past 24 hours.

Indeed, points-based reward programs have become ubiquitous. Businesses of every ilk — B-to-C, B-to-B, charities, employers — now use them to engage with and reward customers, distributors, donors, employees and other key audiences. It’s not for lack of marketing innovation; rather it’s because points programs are consistently proven to work.

The fact is that in general, points-based incentive solutions tend to perform better than other types of reward programs. The very nature of a points system makes it virtually foolproof:

  • Proprietary points essentially become a form of branded “currency” that can be used in a variety of ways, appealing to the interests of many different types of participants. This increases program “stickiness” and participation rates.
  • Points programs offer the flexibility to adapt quickly to changing company needs, program objectives and audiences.
  • The accumulation and issuance of points creates usable, measurable data that offers wonderful insight about participants’ relationships with the business.

Higher Participation, More Impact

Points-based incentive programs are easy to communicate, and readily understood by participants (“I do X and get Y points to get Z reward.”) Most people are aware of the popular “Frequent Flier” programs, and react to similar programs with enthusiasm.

But simply putting a program out there isn’t enough. To be successful, a points program must offer some key fundamentals:

  • A well-rounded reward offering. To the participant, points “currency” is only valuable if it will “buy” something the participant really wants. The most effective points-based programs are those where even the most discriminating participants can find something that excites them. It’s important to offer a broad selection that includes merchandise, travel, event tickets and more — and provide the option to spend points when received or accumulate them for a bigger reward later.
  • User-friendliness. One way to make the program top-of-mind with participants — and thus spur the desired behaviors — is to make information about the program easy to access. Participants should be able to see their point balances, program communication and reward offerings, and be able to get assistance with reward redemption quickly using a choice of methods — via the program web site, email, smartphone app, text, telephone, etc.
  • Ongoing communications. As part of the program design, participants should be prompted to sign up for ongoing program communications in a choice of formats (email, snail mail, etc.) Maintaining that open channel of communication is of enormous importance to the program sponsor, because the program creates an engaged “target list” for marketing additional products and services. It also helps the organization build on its brand. Additionally, experience shows that participants actually want information from the program sponsor, feeling that being part of a loyalty program makes them privy to “inside information” and deals not available to others.
  • Multiple participant/reward levels. Typical sales incentives, including group travel, are designed to reward an elite group of individuals, typically very high performers. In contrast, points programs are accessible to a broader range of participants. In other words, even the occasional customer can get something out of the program at lower points levels. Also, different groups, such as employees, end-users, etc., can also be targeted in companion programs, despite different objectives.

Versatile, Flexible Program Structure

Unlike other types of rewards programs, point programs can readily adjust to the organization’s changing needs and objectives. It might be necessary to tweak:

  • The timeline or length of the program;
  • Special offers (by product or participant group);
  • Types of participant groups;
  • Behaviors and activities that will generate points;
  • Program rules;
  • Administrative access and hierarchy;
  • Financial program or redemption models; and
  • A closing strategy to wrap-up the program.

Technology is the power behind empowerment

Strong points-based programs are supported by a robust technology platform that serves dual purposes:

  1. It provides the “face of the program” to participants — typically in the form of a program-branded Web site where participants can check points accounts, peruse the rewards catalog, and redeem their points for rewards.
  2. It also acts as “mission control” for administrators to not only communicate program information to participants, but also generate useful data about participants, behaviors and activities being rewarded, types of rewards sought, program costs, and more. These days, any incentive system worth its salt will feature a number of integrated tracking and reporting tools that shed light into how well the program is driving desired behavior and ROI. In addition, administrators can get terrific insight about the behavior of particular customer types, and their value, by conducting a segmentation analysis. These reporting tools enable the administrator to continually refine the program for maximum impact and success.

Simple idea, sophisticated results

When it comes to effective incentive marketing ready-made to yield a strong ROI, you don’t really need to reinvent the wheel. Tried and true points incentive programs, although they may be executed in unique and creative ways, offer the key fundamentals — easy implementation, versatility and measurement — that make them the right fit for any marketing, employee recognition, customer care or safety program strategy.