Inspired Incentives

The Power of Points

Posted by Ben Griffith

Tue, Apr 24, 2012 @ 10:46 AM

As someone that sells incentive programs, I often share concrete examples of how non-cash incentives provide a differentiator from the competition. The stories keep coming as more and more people realize the fact that ROI for non-cash incentives far outweighs the ROI potential of cash incentives. To use one example, I heard recently about a particular dealer who had never purchased a certain product category from my client before who is now shifting his business to earn points.  The client projects that this will probably equate to $50-60k in new business, and it's a double win because not only does it mean more sales, but the sales are in a higher margin product category. That story is just one of many examples of new business being generated through a rewards program, but there are other benefits as well. Consider the following story of a current customer:

Situation:  4 competitors were bidding on the same job.  My client's price was $56k (not the highest but not the lowest either).  When the salesman made the offer, he reminded his dealer customer that he would also receive points if he went with them (and could redeem them for thousands of merchandise items, individual travel, or event tickets).  As it turned out, the incentive program was already top of mind for the dealer, and he had even visited the rewards website prior to the salesperson's visit to determine how many points he would earn on the deal.   

Results: The other night, the rep received a call from the dealer informing him that another competitor was $600 lower in price.  However, the dealer continued, "We're going to let you have the sale because we like those points."  Not only did my client save money on the deal by giving points away instead of margin, he was able to gain a new piece of business that he probably would not have had otherwise.

Both examples above illustrate the fact that incentive programs can and do help companies differentiate themselves from the competition and avoid pricing wars. Incentives are a great sales tool that can help give reps something other than price and product to talk about with their customers. 

Topics: Performance Improvement, Loyalty Programs, Sales Growth, OnDemand Awards, Success Story, Points Based Incentive Programs