The topic of rewarding customers for being references has always elicited a spirited debate. The same goes for spiffs for Sales and other teams that are part of the customer reference ecosystem.
What’s the debate all about? In the case of rewarding customers for acting as references (e.g., reference calls, press, etc.), the main objection is that rewards constitute a form of bribery, and true advocates shouldn’t need incentives to reference for a company.
Rewards for salespeople, customer success, or others who might nominate happy customers are sometimes viewed as “paying people extra to simply do their jobs.”
To better understand the current practices, we recently conducted a reward benchmark survey with our clients, and the results were most interesting.
Before looking at the results, it’s worth noting that reward types are on a spectrum with market norms on one end and social norms on the other. Market norm examples include cash, gift cards, and branded swag. Social norms are more personal and include rewards that strengthen the bond with your business/brand. The social component translates as membership benefits rather than “pay to play.” They are more powerful than market transactions. This is a well-worn path in B2C (e.g., loyalty rewards).
Here are some of the highlights from the survey regarding customer rewards.
- 46% of respondents have a formal customer rewards program.
- 61% tell their customers about potential rewards upfront.
- The top reward items are branded swag, gifts such as Amazon Echoes and iPad Minis, and complimentary passes to customer conferences.
- 70% use a third-party fulfillment vendor to handle customer rewards, and just over half enable customers to redeem the rewards themselves.
- 55% said they expire accrued rewards 12 months after the customer’s last advocate activity, and 20% currently don’t expire rewards at all.
- Improved customer engagement was cited as the primary goal. Customers engage in more advocate activities because they enjoy the rewards and feel appreciated.
- Most appreciated reward: conference passes.
- Swag and gifts are common, but there’s an opportunity to make advocates a bigger part of your business through extended access to executives, participation on advisory boards and professional development, which typically don’t run counter to company policies on gifts.
- Third party fulfillment companies are becoming more popular. Those that come up most commonly are Sendoso, Gravy, Loop & Tie, and Thnks.
- Most companies don’t formally measure the impact of a rewards program on customer participation or sentiment, but activity levels/engagement are the most common success metric.
Here are some of the survey findings regarding stakeholder rewards for salespeople and other customer-facing co-workers.
- Just 32% offer incentives to internal stakeholder for participation in the reference program.
- Of those that did, 89% had a formal program, and it was perpetual/ongoing. Half of the companies also ran short-term campaigns as needed to fill their database gaps.
- 88% did not use leaderboards for participants to track their standing/progress.
- The top rewards: cash, gift cards, and prizes.
- Reward program success was measured by engagement: participants’ willingness to nominate, content produced with the participant’s assistance, etc.
- Many companies are finding that advocate programs can grow faster and have a greater impact when they incentivize Sales. The philosophical opposition doesn’t produce the desired end result.
- It’s important to have a good understanding of what incentives “move the needle” for the Sales team: not just the types, but amounts.
- Salespeople respond to recognition, reward, and competition. If they can’t gauge how they’re doing against their fellow gamers, the competitive element is moot.
Rewards programs are not “set it and forget it.” They need to be carefully crafted to be of interest to participants. You may think you know what will be valued, but you won’t know for sure unless you survey the players.
If you have a customer advisory board, include this on the next meeting agenda. The same goes for your advocate program advisory board, which all programs should have.
Set some goals for the outcomes of your rewards programs. They may not be the right goals in the beginning. That’s okay, revise them as you learn. However, don’t assume your company’s investment is working because it’s been launched.
Lastly, use your rewards programs strategically. They should reinforce your advocate program’s goals, which should align with your CMO’s and your company’s top goals. Paying for low priority results are a waste of everyone’s time and your budget.