Incentives Can Provide a Path to Brand Loyalty

Loyalty marketers are always trying to attract consumers to their brands any way they can. Acquiring and retaining customers can pose a difficult challenge.

Incentives are a way to pave a path toward brand loyalty.

Loyalty360 caught up with Virtual Incentives CEO Jonathan Price to find out more about incentives and their potential impact on customer engagement and brand loyalty.

How can an incentive mean more than a one-time event for customers and, instead, draw them in toward greater brand loyalty?

Price: I think everyone in the marketing space is seeing that brand loyalty, in the traditional sense, is becoming a harder and harder thing to win. Incentives can provide a tangible way to encourage loyalty. For example, let’s say someone makes a purchase at a particular store or store location – or even a specific brand - and is then incentivized for that. Because of the reward, that person’s loyalty to the brand is heightened and the reward can encourage repeat visits and purchases. When customers feel rewarded for a behavior, they’re more likely to repeat it. For even greater impact, the use of virtual incentives allows brands the opportunity to use the reward experience to further engage and delight the consumers. Our study found that 82 percent of respondents who received their preferred incentive from a brand would want to purchase from them in the future. 

Can you talk about the evolution of incentives and their impact on consumer behavior?

Price: People are expecting the latest technology to be integrated into every aspect of life, and this is also reflected in the incentives space. That’s why over the past few years, development and delivery of rewards have shifted from a physical, lengthy process to instant digital delivery. 

Digital delivery also means we’re meeting reward recipients in the place of their choice, including mobile. Creating a seamless, personalized incentive process from start to finish – such as instantly receiving a reward and then redeeming that reward just as instantly online - resonates with a technology-driven public.

In a recent study we did on consumer preferences when it comes to incentives, we found that behavior definitely can be influenced by the right incentive. Respondents preferred a digitally delivered card that could be used anywhere, such as Visa or MasterCard. In addition, respondents said that the right incentive would influence purchase decisions among women, in particular. Twenty-eight percent of women reported that they bought a higher number of items based on an incentive offering. This shows that brands can use incentives and rewards to shift behavior – if they deliver on increased consumer expectations on the delivery and interface. 

What is being done well in this space and where do the challenges lie? 

Price: We’re getting better as an industry at evolving our products to meet changes in consumer demand. I’m pleased with both the growth and receptivity of using virtual incentives. Both companies and consumers have adopted and appreciate the major advantages they provide. Going digital has enabled brands to provide consumers a better reward experience. But, many of the features digital affords still aren’t utilized enough. For instance, we’re pushing brands to take advantage of mass personalization. Digital delivery allows for brands to make the reward much more special and do more during the reward experience. The onus is on us, the incentive providers, to show the many benefits of going digital.  

One way we’ve found that this shift has become streamlined is through an API. Our API allows provides scalable technology that makes relevant, personalized interactions easier to achieve and also provides a turnkey integration into existing systems. This kind of investment in technology can allow brands to gain efficiencies while meeting audience expectations. 

How do companies go about determining which rewards/incentives will be most effective as far as customer engagement?

Price: Adopting incentives that really speak to unique consumer preferences is paramount. From our many years of experience providing incentives, we have a good idea of the types of programs that will resonate best with a brand’s target audience, but it’s important to give careful consideration to consumer profiles. Obviously, incentives that resonate with millennials may not generate the same enthusiasm from Baby Boomers but there is so much flexibility in incentives today that our programs can be tailored to suit a wide variety of preferences. 

For example, in our white paper, “The Impact of Incentives on Consumer Behavior”, we honed in on consumer preferences. Overall, among our respondents, we found that one-third of people prefer a digital card as an incentive, with a mailed physical card coming in second. It’s important to analyze the audience before choosing an incentive, as gender, income level, education level and more affect the reward preference. 

How important is truly listening to customers when brands look to develop an effective incentives program?

Price: We live in a time of unparalleled accessibility to data, which means that, more than ever, brands have a real window into consumer behaviors and preferences. Our research has shown that personalization is of increasing importance to consumers and can help to drive perceptions that the brand cares about them and values their loyalty. Providing them with incentive options that really speak to personal preferences can have a profound impact on program effectiveness. 

What are some of the current consumer perceptions and preferences surrounding incentives?

Price: I can’t overestimate the importance of mobile. We are hyper-focused on meeting consumers on their preferred device for the reward experience. Increasingly, that is their mobile phone. A beautiful mobile experience dramatically improves programs that are driving purchases in-store or online.

Similarly, speed and instant delivery is no longer a novel feature. It is a consumer expectation. In addition to increasing consumer satisfaction with the reward, it helps drive the desired behavior by offering a reward immediately.

Recent Content

Membership and Pricing

Videos and podcasts

Membership and Pricing