Rewards programs DO work! You reward repeat customers and your sales increase. I’ll bet that you have 4-5 rewards cards between your wallet and your smartphone right now. In fact, Starbucks credits their rewards program to a large degree for their increase in profit and revenue.

Here are some tips to follow…

Between visiting clients and speaking at conferences, I spend my fair share of time at airports.  Recently a common practice caused me to think.

I was standing at the gate, waiting to come back home to Dayton. Looking around, I was surrounded by fellow Buckeyes wearing scarlet and grey. Most leading carry-on bags like square dogs out for a stroll.

Finally, the desk-jockey spoke up and started boarding the plane…

  • Babies, elderly and uniformed military can “pre-board”…
  • First Class…
  • Super-Special Executive Platinum members…
  • Super-Duper-Special Elite Platinum members…

Lonely Traveler(We wait while the airport bouncer removes the velvet rope from the “second class” lane – you know, the one without the special carpet.  Boarding continues…)

  • Regular Platinum members can now board…
  • Those with the airline’s credit card…
  • Gold…
  • Silver…
  • Bronze…

(I scan for a podium, ready to launch into some country’s national anthem)

  • Ruby…
  • Sapphire…
  • Amethyst…

(Scarlet and grey is dwindling away at the gate. All of the square doggies have been put to bed)

  • Diamond…
  • Coal…

Soon it feels like its just me standing there, alone on a non-reward island … and my boarding pass says I’m in Zone 3!!!

Clearly, no other industry has thought through rewards programs quite like the airline industry. Or over-thought it.

I know that many of my fellow frequent flyers may protest, but I don’t see the benefit in all of these rewards categories.

  • I don’t care about prestige
  • I don’t fly with my family, so earning one free flight is little incentive. And have you seen how far you have to fly for that (or any) reward?!?!
  • I’m always going to select the flight that is cheapest for my client – regardless of the logo on the plane
  • That special carpeted lane does nothing for me
  • I certainly don’t want to spend more time sitting on the plane than I have to

That’s not to say that I haven’t used airline rewards points. I do run with an awesome Garmin watch that I received solely from points. And when a flight over-books, it is nice to board while there’s still room for your carry-on in the overhead.

As you think through your rewards program, keep this example in mind.

Rewards programs DO work! You reward repeat customers and your sales increase. I’ll bet that you have 4-5 rewards cards between your wallet and your smartphone right now. In fact, Starbucks credits their rewards program to a large degree for their increase in profit and revenue.

Keep these facts in mind:

  • Most people use between 3-5 financial institutions between checking, savings, loans and investments
  • A strategic rewards program can differentiate you from the competition while they select the next financial product
  • Rewards can increase retention
  • Rewards can increase balances on both side of your ledger

Here are some tips to follow:

  • Make the reward tiers attainable: You’ll engage more people if the program is not seen as too difficult.
  • Reward sooner than later:  We are a society of immediacy.
  • Look at your rewards from your customer’s point of view: Seriously … a lane with a special carpet? Come on, airlines! Make sure your rewards matter.
  • Tiers aren’t bad … but: Keep it simple! Tiers can promote further engagement, but A) the added rewards have to be worth the customer’s efforts and B) don’t have too many tiers.
  • Train your staff: Make sure your team is onboard with how the customer AND the institution win with your reward program. When they staff understand that they are doing right by the customer as well as the paycheck, they will be more likely to talk it up.

Rewards programs can have a great impact on your bottom line, but they are not for everyone.  The bottom line is that the program has to serve a larger strategic purpose.  Make sure you set specific, measurable results, and then track your program regularly. If your rewards program is not a win-win proposition for you and your customer, then it’s a lose-lose. Thant’s the “point.”

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