Earlier this year, the Incentive Marketing Association (IMA) held its Annual Summit in Snowbird, Utah. This event brought together a wide range of professionals and thought leaders from across the country to talk about the state of the incentive and B2B loyalty industry and the current trends that are impacting the space.
The three-day conference featured many useful and informative presentations on the latest industry research, and I walked away with a number of practical takeaways and actionable insights that could be worth incorporating into our corporate strategy. But without a doubt, one of the highlights for me was being able to lead a session on a market research project conducted with fellow IMA members and led by Chris Galloway.
Titled “Emerging Best Practices and Innovation in B2B Incentive and Loyalty Programs”, the research was commissioned by the Incentive & Engagement Solution Providers (IESP), an internal working group within the IMA. As the name suggests, it highlights the current best practices in B2B loyalty program execution, and presents first-hand the expectations of incentive solution customers and designers. Perhaps most importantly, the research speaks to the rapidly evolving trends and innovations currently at work in the loyalty incentives industry at large.
While there’s certainly a lot to unpack from what was uncovered during the research process, below are some of the highlights:
Long-term Focus and The Value of People
It was surprising to find that in the current macro environment, respondents remain focused on the long-term goals and strategic impact of their B2B programs. Rather than simply looking for short-term gains, customers and designers continue to evaluate their programs in terms of lifetime value. This was evident in the Top Program Objectives that respondents cited:
- Motivating people/customers to achieve greater results for our organization
- Recognizing and rewarding members/customers for their continued loyalty to the brand
- Building deeper relationships with our most important business drivers
Additionally, what’s also interesting here is that each of these objectives speaks to the importance of establishing stronger connections at the personal level. “Motivating people”, “Rewarding members”, and “Building deeper relationships” all suggest that these key program stakeholders have identified the human element of their programs as the single most important value driver.
KPIs Over ROI
Another revelation from the research was that customers and designers are highly attuned to their programs’ specific KPIs. While “Return on Investment” did make it onto the list of Top Key Performance Indicators, it only ranked fourth, and was sandwiched between a number of more targeted metrics:
- Revenue Growth (annual, quarterly, etc.)
- Engagement Rate (active program behaviors)
- Market Share Growth (share of wallet)
- Return on Investment
- Member Retention (reduced turnover)
What this suggests is that these incentive loyalty program stakeholders are less in search of more “bang” for their program “buck” and instead focused on the strategic goals that are unique to their business. These results also indicate an awareness that incentive loyalty programs can in fact achieve these varied objectives, if structured appropriately.
The Future of B2B Loyalty is Personalized, Integrated, and Technology-Driven
When respondents were asked about the Future Drivers of Program Growth and Engagement, their top responses tended to gravitate towards three things: personalization, integration of services, and technological innovation:
- Ability to run many short-term promotions under one umbrella program
- Offering one-of-a-kind reward experiences
- Highly personalized journey encompassing full member lifecycle
- Omni-channel integration for acquisition, engagement, and retention
- Machine learning and A.I. helping to segment and recommend offers that convert
- Plugging into a larger rewards ecosystem, providing more choice and relevance to members
- Allowing members to establish their own goals and chart their own journeys
Personalization has become a big buzzword in the incentive space, and this was clearly in focus as program customers and designers seek more targeted ways to provide rewards, set goals, track and measure progress, and communicate with their participants. Of course, as their programs become more nuanced and individualized, stakeholders will also be in need of a way to efficiently manage the various tasks and data that will accompany these advances. As a result, they are anticipating the availability of increasingly sophisticated ways of integrating their multitude of incentive strategies. Unsurprisingly, these stakeholders believe that the leveraging of technology will play an important role in this, with the expectation that their incentive partners will be able to deliver the tools needed to maximize their programs’ efficiency.
There are, of course, many more insights that were uncovered in this research report, and for anyone who’s interested in a more complete view of where the incentive industry is at, and where it’s going, I highly recommend that you download the full report.
But if we zoom out on some of the key takeaways, the report brings to bear a few important considerations. While the bottom line will always be a key driver of any incentive strategy, we shouldn’t underestimate the value that clients continue to place on relationships—relationships with their incentive partners, as well as the ones they hope to strengthen with their participants. In this sense, it was refreshing to see a broadening awareness of the possibilities and optionality that incentive loyalty programs can bring to bear.
Going beyond a simple “do this, get that” program structure, corporate buyers have made it clear they’ve begun to recognize the myriad behaviors that can be incentivized with the proper program structure. As a result, their expectations of what’s possible will only continue to evolve and grow more sophisticated in the coming years and even quarters. So, it’s on us, the incentive solution providers, to deliver on these expectations by providing things like a more intuitive and frictionless user experience, more adaptable tools, more touch-points for engagement, and more targeted analytics. This is the future of loyalty incentives. It’s up to us to be ready for it.