Rewards & Customer Advocacy Programs

Rewards have become a staple of customer advocacy programs, but we find there’s still a lot of uncertainty about how to approach designing, promoting and maintaining them. Here’s our take on what to consider, and what’s worked and not worked based on work with our clients.

Why Consider a Rewards Program?

Before you go too far down the rewards path, make sure you can answer the question—Why are we considering this?—inevitably asked by those who hold the requisite budget.

On a personal relationship level, rewards are a means for showing gratitude to our customers. There’s plenty of debate around whether rewards are the reason for a customer doing an act of advocacy, or the post-activity “thank you.” The former is often frowned upon, viewed as “buying a reference.” In general, we don’t believe that most customers would participate, purely for the reward, if they didn’t feel confident or comfortable persuading peers to go with a vendor. That’s a lot of reputational risk, and integrity is an important currency in business.

Back to the key business question: what are the typical business objectives that make a case for a rewards program? It’s all about creating an ongoing relationship that not only encourages customers to use the product or service more frequently and broadly, but also fosters brand loyalty and positive word-of-mouth. That goodwill, managed effectively, translates to:

    • More compelling lead generation activities
    • Substantial influence on sales win-rates
    • Expansion existing customer footprint
    • Improved satisfaction, and therefore retention

All of which, we can agree, have  major implications for company growth.

What Rewards Resonate?

Once there is buy-in for the purpose of the program, it’s important that the right rewards—those that move customers to participate—are offered. Know your audience. The group least likely to have interest in conventional rewards are VPs and CxOs. The most active programs are comprised of directors, senior managers and managers—depending on your specific industry and buyer persona. Your program advisory board is a good source of insights; a solid starting point. If you don’t have a board, then consider an advocate survey. Some programs bucket customers with similar preferences into segments. But, we believe customers are ultimately individuals and a one size fits all—even in a segment—can be a fraught assumption, so better you get to know each customer’s preferences and store them in their profile. There are so many reward options, starting with the basics:

    • Product discounts (% or fixed amount)
    • Free or upgraded services (consulting, maintenance, support)
    • Tangible goods (branded merch, gadgets, and other gifts)
    • Exclusive access (advisory board membership, beta testing, VIP events)
    • Gift cards (store-specific, universal gift cards)
    • Charitable donations
    • Subscriptions (lifestyle services, fitness apps)
    • Public recognition / acknowledgement
    • Brand ambassador status

The only limit on unique, memorable rewards is your own imagination. Here are some outside-the-box ideas:

    • Private concerts
    • Meet-and-greet sessions with celebrities or industry notables
    • Workshops and classes (wine tasting, cooking, baking)
    • Travel experiences (all-expenses-paid, exclusive)
    • Adventure experiences (hot air balloons, diving, safari, biking tours)
    • Merchandise autographed by celebrities, authors, industry luminaries
    • Health and wellness (spa days, wellness retreats)
    • Educational courses (personal or career, like MasterClass)
Define Clear Rules

It’s important to think through the rules (and administration of those rules) of a rewards program because if there’s any mystery, the uptake is going to be undermined and all will be for naught. Although you might want to create a layered, gamified experience (badges, accelerators, tiers), always reduce complexity. Keep it simple and accessible to maximize participation.

Essential Communication

Your audience needs to know about the program before they can evaluate the benefits of participating. The initial announcements generate buzz and grab attention, but it’s the ongoing updates that ensure momentum. If customers are earning points, which can be redeemed for any of the items listed above, then they should be regularly informed of their point balance as well as their redemption options. This is no different than the updates you get from your credit card providers or favorite airlines. If you’ve ever had a hard time obtaining your rewards, take note. This is a real buzz-kill and must be avoided to achieve a positive customer experience.

Ensure Administration is Sustainable

The tracking of rewards can be a significant part of someone’s job. If you don’t have the bandwidth, then opt for a simpler, more manageable program. Better to be successful and simple than fail at what should be a satisfaction multiplier, not a hassle for your customers.

Keep Measurement Top-of-Mind

Observe how the behavior of advocates who participate in your rewards program is affected, in business terms. While feedback at a customer sentiment level is important, don’t lose sight of those business objectives. Your control group is comprised of either customers not in the advocate program in general, or those in the program who aren’t leveraging the rewards program. Both may be interesting to compare to those advocates who are taking advantage of reward benefits. Are you seeing an impact, such as?

    • Influence new sales – Are rewards resulting in more participation in lead gen activities, and in improved win rates?
    • Retention – Do you find there is a higher retention rate?
    • Expansion – Are you finding increased spending rates?
    • Improve satisfaction – Is the average satisfaction score higher?
    • Motivate action – (attending events, providing feedback, etc.)
Reward Pitfalls

As you’re putting your plan together, keep these potential pitfalls in mind. A rewards program is very visible, to both customers and leadership. Damaging customer relationships is the last thing this initiative should accomplish!

If it’s not possible to gauge the success of the program, that’s a problem. Think through the reports you’ll need before you launch. You’ll want to be sure you have the necessary data, in a timely fashion, before committing to specific metrics.

If you aren’t seeing the participation you anticipated after the initial flurry (3-6 months after launch)  of interest, then there are a number of areas to review:

    • Insufficient or misaligned rewards
    • Same old reward choices can lead to disinterest
    • Irrelevant rewards, lack of personalization
    • Program complexity/confusion
    • Lack of regular program updates

While rewards programs are a meaningful component of customer advocacy, their success hinges on thoughtful design and management. To truly engage and retain customers, rewards must resonate with their personal and professional values. This requires not only a clear understanding of your audience’s preferences, but also a strategic approach to communicating and administering the program. A well-executed rewards program not only incentivizes desired behaviors, but also enhances customer satisfaction and loyalty, driving significant business outcomes such as increased sales, retention, and the holy grail: brand advocacy. As you venture into your rewards strategy, remember to keep it simple, personalized, and closely aligned with both customer needs and business objectives, ensuring the program remains a valuable asset rather than a program blunder.