As someone who works for an incentive marketing company, I often find myself sharing examples of how non-cash incentives are more effective than cash incentives. Fortunately, it’s not hard to produce these success stories, because over time, more and more companies have started to recognize that the typical ROI for non-cash incentives far outweighs the typical ROI potential of their cash counterparts.
To use one example: I heard recently about a particular dealer who had never purchased a certain product category from my client before, but who now found himself shifting his business in order to earn points. Over time, my client projects that this change in buying behavior will probably equate to $50k-$60k in new business; it’s a double win because it not only means a greater number of sales, but the sales will also be in a higher margin product category.
That’s just one real-life example that highlights how new business is being generated through points-based rewards programs. Want another? Consider the following story of a current customer:
Situation:
- Four competitors were bidding on the same job.
- My client’s price was $56k (not the highest, but not the lowest either). When the salesperson 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 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 wouldn’t have earned otherwise.
Both of these examples illustrate the fact that incentive programs can and do help companies differentiate themselves from the competition and avoid pricing wars and SPIF-competitions. Points-based incentive programs are a great sales tool that can help give reps something other than price and product to talk about with their customers. My goal is to help get these point programs off the ground so that the next time your customers have a decision to make, you’re top of mind.
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