Did you know that the Canadian advertising market is among the ten largest ad markets in the world? In 2019, Canadian businesses invested more than 11 billion U.S. dollars in ad spend alone, a trend that is set to continue. Most businesses invest in a combination of traditional (print, radio, television, etc.) and digital advertising. This helps them build awareness of their brand, driving traffic to their website and/or physical location.

This is where a customer incentive program can be quite handy, offering something of value to potential customers that encourages them to purchase your products or services. The types of rewards offered vary from business to business, along with whether they are well established with an existing client base. 

In this guide, we will explore what a customer incentive program is, the different ways you can reward your customers and/or potential shoppers, how such a program can help your business grow and thrive, and much more. Let’s get started.


What Is a Customer Incentive Program?

In short, a customer incentive program motivates prospects – potential customers – to shop with your business. It rewards them for doing so. If your products and/or services satisfy the customer, they might sooner choose your business over a competitor for future purchases. There are other terms commonly used for this, such as customer loyalty or reward programs, but these are actually all unique parts of the same strategy.


8 Ways to Reward Your Customers for Their Loyalty

Business Meeting


1. Rewards points

This is the most common type of offer used in a customer incentive program. By going this route, customers accumulate points for each purchase. These can be exchanged as if they were a form of currency for exclusive discounts, cash back, or other perks. These benefits encourage them to shop with your business in order to accumulate rewards points. 

Of course, you can give prospective customers other ways to earn these points, such as rewarding them for sharing social media posts, leaving a review, or even simply as a birthday treat in their email inbox. The choice is yours, and your business has a better chance of retaining customers by giving them more ways to earn rewards points.

71% of loyalty program members say that their membership is an important part of their relationship with the sponsoring brand. Therefore, by implementing a rewards points strategy as part of your customer incentives program, you are effectively creating a stronger bond with your customers and prospects.


2. Cash back and discounts

Offering customers cash back and discounts encourages them to continue shopping with your business. Whether you offer a specific product or service, everyone appreciates a good deal, and your customers will logically try to save wherever – and whenever – it is possible to do so. 
This can be especially lucrative if you sell a type of product or service that is likely to result in more sales from a single customer, such as when selling automotive accessories and repair services. 


3. Bonuses or store credit

If customers enjoy your products and/or services, store credit or bonus incentives can convince them to remain loyal to your business. This keeps them away from competitors down the street, especially if the reward incentives you offer are better. 

Like with other reward types, you can utilize special events including various holidays, thank customers for shopping with you again, and otherwise when providing bonuses or store credit.

4. Free products or gifts

Generally speaking, these are incentives used to encourage customers to remain focused on your business, potentially investing in your other products or services. Cosmetic samples, earphones, and other low-cost freebies fall under this category, usually given out as part of a promotion when purchasing a specific item, signing up for a newsletter, or otherwise. 


5. Complimentary upgrades or shipping

Everyone loves free shipping, especially prospective customers who live further away from your business and can’t shop in person. This prevents the “alienation” and creation of needless spend hurdles, communicating to everyone that they are equally valued as customers no matter where they are. 

You might also be interested in offering complimentary upgrades, usually on higher-priced products such as vehicles. For these, be sure to examine which specific parts, components, or service add-ons are the most popular. If you can provide something that engages audiences as a complementary add-on, they may be further encouraged to place an order.


6. Early or exclusive access to sales

Email newsletters are the most popular approach, and often subscribers expect to see special coupons, early-bird access links to sales, or otherwise. They don’t sign up just for product reveals and news on how your business is faring; it’s important to reward them appropriately and cost-effectively for doing so. 

Providing limited-time advance access to sales, particularly on hard-to-find items, can also increase your subscriber count, which means more potential engagement and sales in the future.


7. Advance VIP access to new products

Prospective customers, especially those who actively engage with your business via social media or newsletter subscriptions, love feeling like they are genuinely valued. Therefore, should you be preparing to sell the latest hard-to-find video game console, the newest model of a popular sedan, or otherwise, don’t shy away from giving them VIP access. 

This gives your most loyal customers an even fairer shot at ordering products or services that interest them most, helping to keep them engaged while retaining their business.


8. Gift cards to stores or other businesses your customers will enjoy

If you have a great relationship with another business – one that isn’t a direct competitor but whose products or services rather complement what you offer – then try to make use of this connection. Provide incentive not only for customers to shop with you, but to also get to know these other companies. 

Doing so can ensure they have a smooth, enjoyable experience for everything related to a specific product or service, plus those other businesses are likely to refer shoppers back to you. Gift cards or points redeemable at all participating businesses are an excellent solution in this regard.


How Offering Incentives to Your Customers Helps Your Business

Business people shaking hands


75 percent of consumers say they favour companies that offer rewards. And, while it’s true that purchases are the form of customer behaviour most commonly rewarded, you’re not limited to just this action. 

There are plenty of different ways, as we explored above, that you can reward customers and provide a higher level of value at the same time. This helps your business grow and retain shoppers while remaining competitive.

By offering added value incentives through some or all of the methods we mentioned earlier, you can encourage consumers to take any of the following actions:


1. Try your business for the first time

In our extensive customer incentives program experience, along with our years of expertise in helping AIR MILES® Reward Program Partners maximize their potential, we know firsthand that the right incentives encourage customers to try your business. 

Here are two prime examples we have witnessed firsthand of this in action:

  • For an automotive dealer, between 30% and 38% of buyers were doing so for the first time after making use of a test drive offer. In addition, three-quarters of these individuals opted in to receive communications from the business, such as a monthly or weekly email newsletter. This makes it possible for the dealership to send Collectors additional offers later on.
  • An insurance provider implemented a promotion where all home and auto quote requests submitted over a six-week period were entered into a contest. The prize, 25,000 AIR MILES® Reward Miles, was tempting enough to generate a 50% increase in monthly quotes. In addition, there was a 69% increase in net new policies.  


2. Choose your business over a competitor’s

If there’s a competing business, yours needs to offer the best possible product, service, and value to the customer while ensuring they feel valued themselves. Through its many available methods of rewarding shoppers, a customer incentives program can be beneficial in these ways. 

A great example of this is a mid-frequency retailer partner of ours, who wanted to attract shoppers living outside their primary trade area. The incentive of a Reward Mile per every $20 spent per transaction resulted in considerable engagement; over 50% of the AIR MILES® customers travelled more than 20 kilometres compared to 30% of average customers. 

Not only that, but sales originating outside the 50 kilometres radius were six times higher for AIR MILES® customers than with existing ones not enrolled in the program.


3. Spend more per transaction or buy more often

Did you know that implementing a customer loyalty program with your existing e-commerce platform, such as Shopify, has the potential of boosting order quantity by up to 319%? For example, a retail partner of ours recently experienced dramatic year-over-year growth in several different variables. 

These included basket size, the approximate number of transactions, and gross sales overall. Their average transaction size per AIR MILES® Collector increased by 59%, and there was a 118% increase in Collector transactions altogether. Gross sales also experienced a significant increase of 88%. 

With the right incentives and value communications in place, this is evidence that your business is more likely to increase spend per transaction, per-customer purchase frequency, or even both.


4. Choose specific products or services

Specific customer incentive program rewards can increase per-individual interest in a certain product or service. The automotive dealership’s test drive offer we mentioned earlier is a great example of this in action. 

The more you can align the right rewards with the right products or services, the better you can engage your desired audience, potentially motivating them to perform actions that lead to a purchase. 


5. Select extras and higher-end packages or upgrades

Much like how rewards offer Miles and physical items, it can encourage a sale of a specific product or service. Incentives such as discounts can encourage customers to purchase extra add-ons and upgrades. For example, a used car dealership partner wanted to sell more vehicles and increase their number of in-house financing deals. 

They implemented a consistent base offer in all their departments in addition to bonus offers. Those offers were used to clear out inventory while also increasing customer loyalty and retention. As a result, 62% of their buyers ended up opting for in-house financing.


6. Give your business a public review

Establishing a level of trust is important for any business. Ensure yours is in good standing with customers by encouraging them to leave reviews, each of which is essential in generating brand confidence among the public. 

Word of mouth can make or break any business, but a lack of positive feedback will not motivate newcomers to your brand to make a purchase. Offering a discount, Miles, or other incentives for leaving a review helps customers feel that they – and their opinions – are equally valued.


7. Refer friends to your business

The 2018 Bond Consumer Loyalty Report indicates that over 70% of consumers are likelier to recommend a brand if they have a good loyalty program in place. Businesswire also reports that satisfied US customers will share their positive experiences with around 11 different individuals. 

These are considerable gains considering that referrals are crucial when attempting to drive sales, retain customers, and also obtain new ones. Therefore, a customer incentives program is an essential tool that you ought to consider.


8. Come back to you on a regular basis

Repeat business is important, as is frequency. According to smallbizgenius, 82% of companies recognize that retention is more cost-effective than an outright acquisition. In addition, increasing said retention by a mere 5% raises profits between 25% and 95%.

Wirecard furthers this argument by stating that up to 75% of customers indicate they are likelier to purchase again after being rewarded. Furthermore, AnnexCloud indicates that 63% of Millennial and Gen Z shoppers won’t commit to a brand that doesn’t have a loyalty program set up.


Do Customer Incentives Work?

With a sufficient understanding of your target audience, what interests them, what your competitors are doing and what shoppers are positively reacting to, a customer incentives program can elevate your profit and retention potential considerably. 

Along with the many success stories and stats covered in this article supporting this claim, your own customer data can be used to indicate the potential we’ve hinted at today. The right incentives will encourage individuals whose interests align with your brand to take action, which can involve everything from signing up for a newsletter to making a purchase, sharing information about a reward with friends or family, and even coming back again for an upgrade or other purchase to complement the first one. 

In addition, a customer incentives program is an excellent way to generate behavioural data on shoppers, regardless of whether they commit to a purchase or not. And, if they benefit from sharing their data, such as with an incentives program, they’re more likely to be engaged and share more about themselves. 

This can lead to increased referrals and other benefits. For every positive interaction – even if it doesn’t result in a sale at first – your business and each individual expressing interest in it can both benefit in some way. It’s a great way to and optimize your target audience focus and strengthen relationships with prospects.


How to Build a Successful Customer Incentive Program

As noted earlier, a successful customer incentive program is driven by relatability, engagement, and brand trust. If you offer something competitive that also values shoppers and aligns with their interests, your chances of making a sale – or at least increasing referral traffic – are higher. Here are a few quick steps you can take to build such a program:


1. Offer incentives that your customers will value

Your rewards should make sense for the specific product or service offered. This not only confirms that you understand what your customers are interested in, but there’s also a higher likelihood of them feeling valued themselves and feeling more comfortable about purchasing. 

Of course, there’s the added benefit of them potentially saving money or obtaining a reward that excites them, driving brand engagement further.


2. Promote your customer incentives in all your marketing and sales materials

If you have a great deal in place for newsletter subscribers, specific purchases, or even walking in the door, it’s important to present the message to as many individuals as possible. Not only that, but it needs to be clear, concise, and consistent across all your marketing channels – all the specifics of the reward and incentive program itself need to match to avoid confusion or frustration.


3. Keep your employees informed and engaged in your customer incentives program

Educate your staff in advance of a program or specific reward offer rollout, ensuring that all their questions or concerns are addressed. This also means everyone within your business is on the same page, ensuring the messaging is consistent and more effective.


4. Collect customer contact information

Knowing how to reach out to prospects, such as with a newsletter signup, is a great way to communicate new offers that might interest them. Otherwise, you might not be reaching your entire possible pool of shoppers. Of course, you should ensure that each customer is comfortable with sharing specific contact details, which is why a certain level of trust and value is important.


5. Continue to send them incentive offers based on their purchase history

It’s essential that you continue to convey a clear understanding of who a customer is, what they like, and what possible incentives are the most appealing to them. This helps to maintain engagement and commitment towards your brand and can even lead to customer queries, sharing on social media, or purchases themselves.


6. Keep your customers engaged with ongoing incentive offers

Having the right incentive program means having one a customer can easily trust and feel comfortable with. AIR MILES® branded emails, for instance, tend to deliver a significantly higher click-through rate (CTR). In fact, it’s 178% higher in emails with the AIR MILES® Reward Program logo compared to without it.

Key Takeaways


Key Takeaways:

How to get started with your customer incentive program:

  • Identify your challenges and goals
  • Determine what your customers would value most
  • Consider your competitor incentives
  • Define your goals and projected impact
  • Put tools and tracking in place to monitor results


How to tell whether your customer incentives are working

  • Ask for customer and employee feedback
  • Assess the impact of specific offers
  • Measure pre and post results from special events or seasonal offers
  • Track month-over-month and year-over-year changes.


In Conclusion

There’s never been a better time to implement a well-thought-out customer incentive program, helping longtime and first-timers to your business feel valued and genuinely understood. 

Combined with data-driven rewards aligned with suitable products and/or services, regular engagement via communications that appeal to each individual and cost-effective planning, this can be your pathway to increased revenue and growth. 

At the same time, you’ll develop a closer and even more meaningful relationship with your customers in terms of brand loyalty, recognition, and their willingness to refer to you. For more information on how to become an AIR MILES® Reward Program Partner, contact us today. We’re happy to assist!

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