How Does Your Incentive or Loyalty Program Measure Up?

 

Executives want to know what they can expect in return for investing in an incentive, B2B, channel or loyalty reward program. That is a fair question, and one that the incentive industry have had trouble answering succinctly. We can pull from dozens of published case studies and examples, but these are best-case scenarios and not necessarily helpful in setting a minimum expectation — we need a baseline.

The following results come from research conducted and published in the Sept 2021 edition of Sales & Marketing magazine showed some things that could be foundational for program baselines.  Respondents for this survey included program owners and managers from sponsoring brands, as well as design strategists and program directors from companies that provide incentive solutions.

Q: What Kind of Results Can you Expect from Your Incentive Program?

• ·          9 out of 10 Programs Achieve 5-10% Year over Year program lift

o   2/3 of well-designed programs achieve greater than 10% incremental lift

• ·       82% of programs increased retention by 5-10%

o   Half of the expert respondents cited greater than 10%

• ·       90% of the programs achieved ROI’s 2:1 to 4:1

o   One in three of well-designed exceeded a 4:  ROI

With these findings, what is the reason that so many companies implement their own non-cash incentive programs without the assistance of industry design strategists and specialists?  In our opinion the reason is the vast majority of incentive reward companies are devoid of great strategists.  It simply costs too much money to keep them when they have such a difficult time being competitive.  Today you are more likely to have a seasoned veteran of industry calling on you charged with selling you just the “prizes”, which is where most of the budget is.