Does your rewards catalog need a makeover? Some catalogs have many reward options but are inefficient.
Despite having great customer experience, rewards catalogs lead to a paradox of choice.
The problem: too many rewards.
Said another way – choice overload.
When given the option of “not buying,” it turns out that “over-choice” — an overwhelming variety of options — actually turns customers or clients away. – Simon Sinek
The same goes for rewards programs. If there’s too much to redeem for, the easier option becomes not redeeming.
So, what’s the solution? If more choices lead to tougher decisions – the opposite must be true. Less choices help us take decisive action.
A streamlined approach for reward redemption will help participants. That way – they can get the most out of their reward experience.
In this article, we’ll share four ways to give your rewards catalog a user experience makeover.
The Need for Segmentation
Nowhere is this point more salient than with an incentive rewards catalog.
As distribution becomes more streamlined, there’s an opportunity to become more creative and targeted with the choices we offer. An increased emphasis on segmentation and personalization is imperative.
The goal: to take incentive experiences beyond basic transactions.
We must see participants as people, not just customers, employees, partners, or sales personnel.
It’s a monumental paradigm shift.
So where do we start? It helps to reimagine the entire relationship.
A good place to begin is building a participant persona. Understanding personal traits like age, income, topical interests, and other key demographics can help personalize their reward experience.
Obviously, this will mean a greater focus on data collection. Incentive companies will need to get smart about how they acquire data.
Surveys, tracking buying behaviors, and relationships with salespeople will lead to greater customization. This extra effort will have influence in offering not just good rewards, but the right rewards.
Other important considerations in the segmentation/personalization process are firmographics and earning potential.
The latter in particular is essential. A failure to account for it can severely hinder the success of any reward offering.
Here’s an example:
Let’s say your rewards catalog is full of amazing rewards and the average cost is 10,000 points. Upon further inspection you realize the average earning potential is only 6,000.
And you notice something else too. No one is redeeming rewards.
The culprit – earning potential. If your average cost is 10,000 and participants only earn 6,000 – it doesn’t matter if you offer 5 rewards or 5,000. Your rewards are unachievable.
It’s essential to understand your participants’ earning potential, and to model your earning structure around it.
Marketing and Promotion
Data will help us provide more targeted—and thus more motivating—rewards.
Having this data at our fingertips allows us to produce better marketing material around awards. We can create more compelling promotional themes. These subtle, yet impactful changes to messaging will produce greater conversion to individual audience segments.
Here’s an example:
Instead of a “Holiday Gifts” theme, which is broad and unfocused, you could instead say “Tech Bundles for Tech Lovers” or “Make Your Musician Merry.”
Narrowing your marketing focus will appeal more to a tech or music-loving audience. It also tells this group you’re thinking of them as people – not dollar signs or figures on a balance sheet.
As you roll out these promotions, it’s also important to track the success after each launch relative to each other. Recording which promotions and product types do best can give you more insights on what will work in the future. This can lead to more targeted and more effective marketing.
Keep in mind that even if you decide to go with a large rewards catalog, you can still promote it in a segmented and personalized way.
Just make sure you do this in a way that will help drive your campaigns towards specific themes and reward options that are relevant to your audiences.
Shopping vs. Buying
What’s the difference between shopping and buying?
When we go to an outlet or mall and tell people we’re “going shopping,” generally we mean that we don’t know precisely what we’re looking for. But we have an idea of what kinds of products are available and how much we’re willing to spend.
On the other hand, when we search on Amazon, we’re usually there with a specific product in mind. We know we’ll be able to find whatever we’re looking for. It’s just a matter of finding the precise model at the right price.
In this case, the difference between these two examples — shopping and buying — is intent.
Do we know what we’re looking for? And if so, do we expect to find it with relative ease?
When it comes to rewards, a good catalog should have aspects of both the shopping and buying experiences.
On top of browsing for things that might interest them, your participants should also be able to use the narrowed focus provided by your promotional marketing to search with confidence and identify particular rewards that they know they want.
Creating Brand Affinity
Finally, when selecting the right rewards, the goal should be to create an emotional connection between them and our brand.
This might sound strange. We tend to think of marketing and great customer service as clear ways to achieve connection. However, our rewards can also function strategically if all the above factors come together in the right way.
It’s important to note that we don’t necessarily have to provide the exact perfect reward for each participant.
Instead, the key is to establish in their minds the difference between what they need and what they want.
For example, a good reward should be something that participants probably could afford but can’t justify buying. Were they to buy this reward themselves, they might feel regret or guilt about spending their hard-earned money on it.
In other words, you want your rewards to be impractical without the rewards catalog, but aspirational with it.
This could be something like a new iPhone. While their current one still technically works, it’s missing all the bells and whistles of the newest release.
Or it might be a trip to the Caribbean with the family. They could probably afford it, sure.
However, it’s hard to legitimize paying for it when that same money could be used toward your kids’ college fund.
Purchased through an incentive program, however, these kinds of rewards help your participants think to themselves, “I get to treat myself without having to consult the logical side of my brain or take money away from my day-to-day family expenses.”
It’s in this subtle area, between what participants want and can’t justify buying for themselves, that brand affinity truly thrives.
By providing the opportunity (and the excuse) for participants to buy what would otherwise be a splurge, you are fulfilling an intrinsic desire that leads to a thought of, “I might not have bought this myself, but Company X helped me.”
Along these lines, you want to provide options that have a long shelf life in your participants’ minds.
These are things that participants will be proud to have. Thus, they will be more willing to link back to your company’s brand.
Luxury items are a great example of this. While they are expensive, the participant isn’t technically paying for them. So, they can own them guilt-free.
Experiential rewards are also hot commodities these days. They’re both extremely motivating and highly memorable.
Having too many rewards in your catalog may not cause your participants to close their eyes and select a reward. But let’s agree that we can’t rule it out.
We’re often conditioned to believe that more choices are a good thing. Let’s face it – more choices mean more of what we want. So, how could that be wrong?
The truth is that’s not entirely factual. Sometimes less choices offer more freedom to own our choices.
When fewer options are available to us, we’re able to eliminate a lot of the excess noise surrounding our decision-making. That allows us to focus on the choices we’re most happy with.
In the case of rewards catalogs, this means doing a better job of understanding who is looking to achieve them. Then being more specific with what they can achieve.
Because the last thing you want is for your participants to take a look at your catalog and say with a sigh, “I can’t really find anything I like, so I guess I’ll just get . . .”
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