Rewarding Your Customer Advocates

Rewarding your customer advocates, yes or no? Is there a “right way” or a better way? 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.

Bribe or Basic Etiquette?

At the heart of the debate, and the main objection to customer advocate rewards, is that rewards constitute a form of bribery, and true advocates shouldn’t need incentives to be a reference for a company or product they love.

Equally vocal are proponents of rewarding customer advocates. They see advocate activity (reference calls, being a case study, speaking at conferences) as a favor that ought to be acknowledged. The more a customer is willing to do, the more they should be rewarded. It’s only polite.

Rewarding salespeople, customer success, or others who might nominate happy customers to become customer advocates is sometimes viewed as “paying people extra to simply do their jobs.” Other advocate program managers are more pragmatic: “If a spiff, competition, or prize improves the quality and quantity of our customer advocates, it’s a well worth it.”

Market vs. Social Norms

Underlying these different positions is a question about whether being a customer advocate is based on a market incentive or a social connection. It’s worth noting that reward types are on a spectrum with market norms on one end and social norms on the other. The social component translates as membership benefits rather than “pay to play.”

Market norm examples include cash, gift cards, and branded swag. “You get x if you do y.” Social norms are more personal and include rewards that strengthen the bond with your business/brand. They are more powerful than market transactions. This is a well-worn path in B2C (e.g., loyalty rewards).

The Survey Says…”
We were curious about our B2B customers when it comes to internal and external rewards programs. To better understand their current practices, we recently conducted a reward benchmark survey with our clients, and the results were most interesting. 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.

Takeaways

• Swag and gifts are standard, 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 increasingly popular. Automating the processes removes a tactical task from the customer advocate program manager’s plate. The fulfillment companies 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.

Takeaways

• Many companies find that advocate programs can grow faster and have a more significant impact when incentivizing Sale and Customer Success teams to participate.
• 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.

Final Thoughts

Rewarding people for participating in customer advocate programs can be beneficial, particularly if you use it as an opportunity to reinforce brand loyalty.

Rewards programs are not “set it and forget it.” Successful programs are crafted to engage and gratify participants. Don’t assume you know what your customers (or sales team) values—ask them. If you have a customer advisory board, include rewarding customer advocates 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 and 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 is a waste of everyone’s time and your budget.