Are Your Rewards Program Working?
Posted On March 7, 2018
One of the most widespread and effective methods of increasing sales in business is having or creating a suitable rewards program. This is because the rewards program attracts new customers and retains the old customers, making the latter more active in order to benefit from the set rewards. A rewards program can make a customer increase his purchases just to hit the target mark that earns a reward. This is good news as your business will not only bloom but also boom. Which is precisely the reason you came up with that business in the first place. Edenred Singapore is one of the best choices you can engage to prepare a great customer rewards program!
So, how do you come up with the perfect rewards program?
From an extensive research, there are two major ways in which a rewards program can be run. The first is through use of reward points which after being accumulated can be redeemed for certain physical rewards. This method’s success mostly depends on the kind of business you are in. The other way that many successful businesses opt for is the use of physical rewards. This is a more recommended way as it works effectively compared to reward points which might not motivate the customers enough.
Quite literally, if you and your competitor were to start a rewards program, who do you see having more sales volume if they promise to give away a vehicle for certain purchases while you opt to give points that can be used to get electronics, furniture, other gifts or maybe even a vehicle too? People will flock to your competitor’s business more as they can see the physical reward itself. This is just one simple but important illustration of how far a rewards program can go in booming your business. Remember to be the best you have to beat the best!
In order for you to know whether your rewards program is working, there are two main areas where you can deduce through simple calculations.
This is program participation and the redemption rates.
For the program participation, it is the number of people involved in the rewards program out of your customer base. You can then multiply this by a hundred to get the percentage. For an effective rewards program, the percentage should be 40 per cent and above. If not, just try to change your tactics as the current prizes are not acting as the best bait to improve your performance. One of the hardest things to do is make a site visitor a regular customer but a high participation rate will prove authenticity thus making it easier for the viable client to earn your trust.
As for the redemption rate, it helps you tell the performance of the rewards program in how much value the customers are getting from it. You can be able to approximate customer engagement in a simple way rather than involving extra staff to collect the
statistics. As we all know, a business is all about maximizing profits while eliminating all unnecessary costs.
Redemption rate might seem like rocket science at first sight but you can relax as well we have the simplest ever formula to derive yours. Simply take the total number of points redeemed and divide it with total number of points initially issued. If you are dealing with physical rewards, take the number of redeemed rewards and divide it with the original number of total awards before some were won. Whatever the value, multiply with a hundred to get it as percentage. If you used the reward points approach, your redemption rate should not go below 5 per cent. If you chose the physical rewards option, with below 50 per cent redemption rates you better work hard as situation can turn from boom to doom. That’s unfair considering the effort you put into rewards program.
If you see as if the future of your business is bleak, do not worry because all the best solutions have been gathered together to put your business back on its sales line.
What To Do When You Have Low Participation Rate
When you realize your incentives are not as sensitive as you wanted them to be here is what you should do :
1. Promote the rewards program
To increase awareness among existing customers and possible clients. The participation rate may be low because only a few of your target audience know about the reward program. To counter this, make sure you reach out more through your web page and other means that you can afford. A popular business saying is “use money to make more money” so don’t be afraid to spend but not splurge a few coins.
2. Email campaigning
Through this method, you should be able to design a way to tell possible and existing clients what you have to offer and funnel them to your web page so that they can have more information.
3. Offer the rewards that customers want
After all, it might not be the awareness that is killing your rewards program but the very rewards you are offering. You can do a quick social media survey to see what your customers wish was offered and if it is logical, have it featured in your list too. This will not only show how much connected you are to your customers but also make them feel special which will ultimately translate into mega sales.
What To Do When Your Redemption Rate Is Low
You might be boasting of a good participation but have very disappointing redemption rates. It’s worrying especially if quite a substantial number of customers have won rewards but are not redeeming them. So, what next?
1. Email marketing
One of the most powerful tools that a business might overlook is email. However, for most successful businesses, one thing that provided leverage over rivals and that crucial boost up the ladder is emailing customers. Since businesses are run by people who also depend on other businesses, you would concur if I said you feel special when one of them sends an email that puts a smile on your face. With that in mind, you are now aware of the effect of a genuine email telling your customers they have won something for participating in a rewards sales. The customers will come and redeem his prize thus increasing your redeem rates.
2. Understand how your customers think
Try to peer into your customer’s mind in order to know what he thinks of the rewards program so that you can make the necessary improvements.
With those tips in mind, you should be rolling the figures towards your desired direction. Let’s get it!