This informal CPD article ‘Best practices for setting up a customer awards program’ was provided by Product Marketing Alliance, a company founded in 2019 with a mission of uniting product marketers across the globe.
Customer award programs are a fantastic tool to help support loyalty and advocacy programs; they’re a way of acknowledging and celebrating your most important existing customers within your customer base.
But how do you manage these award programs? Do you do them in seasons? What criteria should you use to pick winners? The importance of effective program management cannot be understated.
So, we’re here to give you some pointers to set your awards program up for success.
Set Clear Objectives
We’ve all had it where a higher-up sees an interesting program going well for a competitor and reaches out to you to take advantage of this. But quite often, when the inspiration has come from a place of doing something because someone else is doing it, this can lead to a lack of clarity on the program's aim.
Define program goals
So, step one is to define your program goals clearly. Ask yourself:
- What part of your business could use some extra support?
- Is there a part of the customer journey that is being neglected?
- What have customers had to say about your current customer programs?
- Is there an opportunity to gamify part of the lifecycle process?
- How can this program support overall business objectives?
For example, have you seen a rise in churn among your advocate customers? Perhaps you should host an awards program that celebrates the team and individual with the most longstanding partnership with your company.
Or have you had a new customer come along who’s been involved in every new project you’ve come out with and shared their story with the world? Maybe you should host an award for the rising stars in your customer base.
Primarily, an awards program goal should come out of the desire to celebrate your customers.
Your secondary goal should be to see how this celebration can bolster things like customer retention or increased sales.
Once you have a clear goal in mind, now it’s time to design your program.
Design an Appealing Program
When it comes to long or short award seasons, you’ll have to set up a program differently, with either scope or longevity in mind. Then it comes down to what rewards will suit which type of program.
Choose appropriate rewards
You know your customer base best. All the same, it’s good to get a gauge on what your customers like for rewards too. Conduct surveys or analyze purchasing data to identify customer preferences.
This will help narrow down your list of potential rewards to begin with, but don’t knock the idea of offering a variety of reward options. Like segmenting customers for marketing or retention purposes, customer awards programs should have several personalization options for customers to choose from.
These rewards can be:
- Monetary rewards: Discounts, cashback, or gift cards
- Products or services: Free items, upgrades, or exclusive products
- Experiences: Event tickets, travel packages, or VIP access
- Charitable donations: Option to donate points to causes
Create a simple and engaging point system
If you’re going to go for an ongoing awards program, rather than a seasonal one, clarity and ease of use is paramount. Customers need to know exactly when and how to get these awards.
Make sure to:
- Keep it straightforward: Use a clear points-to-currency ratio (e.g., 100 points = $1), and make sure to avoid complex calculations or confusing terms.
- Make earning points easy and intuitive: Award points can be based on purchases, referrals, or specific actions (depending on the goal you established).
- Gamify the experience: Fun is always a good motivator! So make sure to add achievement levels or badges that customers can collect. Why not celebrate the launch of a new product or feature by creating challenges or limited-time bonus point opportunities for customers to take advantage of.
Ensure reward attainability
Gamification is all well and good, but what you don’t want to do is make the process too challenging for your customers. This may take a little bit of trial and error (which is where customer feedback comes in handy), but make sure your program has:
Realistic point thresholds
Set a balance between motivating customers and being achievable, and make sure to offer a mix of low and high-point rewards (So even the least engaged customers are still getting a taste of the potential rewards given to the most engaged ones).
No-expiry or long expiration periods
Allow customers to accumulate points over time. There’s nothing more infuriating than taking the time to collect and earn points only to discover your points count resets in the new year.
Reward your customers for their commitment to the awards program - You could even consider adding a "points boost" for your most long-term members.
Early wins
One of the ways to get your customers on board with your program quickly is to give them a taster of the wins they could be getting. You can offer a welcome bonus or some easily attainable rewards at the beginning to encourage early engagement. Doing so will set customers up for more sustainable engagement in the long run.
Conclusion
Customer awards programs are fantastic for building loyalty and celebrating valued customers. But to create an effective program, it's crucial to start by setting clear objectives that align with your business goals and address specific customer needs.
Whether you're aiming to reduce churn, recognize long-standing partnerships, or highlight rising stars among your clientele, your program should be designed to first celebrate and second build on business metrics like retention and sales growth.
The key to a successful awards program lies in its design and implementation. This includes:
- Choosing appropriate rewards that resonate with your customer base,
- Creating a simple and engaging point system, and
- Ensuring reward attainability.
By offering a variety of personalized reward options, you can create a program that not only appeals to your customers but also drives long-term engagement.
We hope this article was helpful. For more information from Product Marketing Alliance, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.
