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Earn Higher ROI with a Data-Driven Incentive Strategy

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When it comes to the success of an online incentive program, communication is key. It may seem like a no-brainer: send out some emails, make a few announcements… how hard can it be? But many companies neglect to utilize participant data to its fullest potential in communication incentive strategies.
Using a data-driven approach to formulate your communication strategy with program participants is the key to an effective, active incentive program and—most importantly—increased ROI.
Research, research, research
Take a close look at your participant data: it could be that results are underwhelming because your communication approach isn’t appealing to their demographic. For example, a recent study found that 60% of millennials would prefer to communicate with businesses via two-way texting, as opposed to traditional phone calls and emails. As millennials enter the global workforce in ever-increasing numbers, it’s important to keep their preferences in mind when developing communications strategies.
Use the information at your disposal
When starting up an incentive program, it’s common practice to ask participants for basic information during the sign-up phase like their age, birthday, location, and preferred methods of contact. If you’re currently running an incentive program, chances are good that you already have all of this information on hand. Use it! Those details can be used to send out personalized communications to your participants that will make them take notice and appeal to their sensibilities.
Measure your data
Once you have your incentive program off the ground, it’s important to remember to keep track of your communications data. Use it as a metric for the health of your communications initiative. A good incentive program provider will equip you with the tools you need to accomplish this: things like message delivery rates, open-and-click statistics, and corresponding participant activity. Use this vital information to tweak your incentive program communication to ensure a higher ROI.

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Earn Higher ROI with a Data-Driven Incentive Strategy

  1. 1. EARN HIGHER ROI WITH A DATA-DRIVEN INCENTIVE STRATEGY
  2. 2. One of the essential techniques for getting maximum thrust out of an incentive plan is pairing online incentive technology with a data-driven implementation and measurement strategy. How do you do that? By knowing what data to look at, where to find it and how to interpret it as key performance indicators (KPIs). Here are the best practices we recommend for improving your incentive strategy using data.
  3. 3. #1 Set strategic goals for your incentive plan. Data-driven goals are the lynchpin of a data-driven incentive strategy. If you work with specific goals in the very beginning and those goals are informed by specific data, you’ll have a much clearer picture of the impact your incentive plan is making on your business. You want to increase inspection and aftermarket services to both increase margin and head off issues with clogged coils in your brand’s air conditioners. You look at sales data to determine fewer customers have been signing up for inspection and aftermarket services over the last few sales quarters. From this data-driven approach, you may decide on a sales incentive program goal such as “increase inspection sign- ups by 20% in six months.” Lets say that…
  4. 4. #1 Set strategic goals for your incentive plan cont. Strategic incentives goals should have some context backing them up. You should have the answers to questions such as: You should gather enough benchmark data for an ROI projection. The best source of incentive program benchmark and ROI data is the incentive company you partner with. What’s the average return on investment (ROI) for incentive programs with similar goals? What incentive program results do companies similar to yours experience?
  5. 5. #2 Track enrollment and participation in your incentive program. Once your incentive program is underway, you’ll want to get very familiar with the activity levels of who sign up to the program, i.e. the participants. Pay close attention to how many participants fall into each of these four groups: 1. Invited but not signed up 2. Registered 3. Registered but inactive 4. Registered and active/engaged Numbers in the registered groups will, of course, grow over time, but you may notice issues shifting them into more engaged statuses. If the data shows a high percentage of participants in the “invited but not signed up” group long after the program’s launch, it’s time to kick off a marketing campaign to remind those participants to register.
  6. 6. #3 Track rewards redemption rates. Participants of online incentive programs earn digital points that they can spend in the program’s online rewards catalog. It’s important to track redemption rate data because it tells you two things: How much you’ll be spending on rewards cost, if you’re using a billing model that lets you pay for reward points as they’re redeemed. How much value your participants see in your incentive program. 1 2
  7. 7. #3 Track rewards redemption rates cont. • Redemption rates won’t skyrocket right off the bat. It takes time for participants to get familiar with the program, bankroll points and spend them. • If your redemption rate falls below these benchmarks, you might consider adjusting your payout structure or enacting points expiration rules to encourage redemption. Looking at redemption rate data regularly will help show you when and where you need to tweak your incentive strategy.
  8. 8. #4 Research strategic incentives communication and measure its effectiveness. • Clear, compelling communication is essential to strategic incentives that earn ROI. To get the right calls to action to your participants in the right way, do a little digging into what makes your particular participant audience tick. • What influence does their demographic have over their communication habits? For example, research shows 60% of Millennials prefer to communicate with companies through two-way texting. • Even better than grouping your participants into broad generational categories, treat them like individuals and ask them how they want to be reached. The best way to capture this information is to include a field for it on your incentive program enrollment form.
  9. 9. #4 Research strategic incentives communication and measure its effectiveness cont. Study activity and behavior data from your incentive program reports to determine what kind of messages you should send. • For ex: Many companies see high reward points redemption rate during the holidays. If your reward redemption reflects this trend, onsider a redemption stimulation campaign during other gift-giving occasions, like Valentine’s Day. Measure communication interactions to maximize messages’ effectiveness. Use communication tools to study your messages’ delivery, open and click rates. • For ex: If messages about online point balances get higher open rates than messages about program updates, place important updates on the incentive program website when you send point balance reminders, as participants are more likely to visit the site at that time.
  10. 10. #5 Track sales performances and results. You should closely monitor all results and performances within your incentive program. When you’re running a sales incentive or B2B loyalty program, for instance, take advantage of online incentive sales tracking technology to enable capabilities such as: • scheduling multiple sales promotions at the same time • invoice uploading for faster sales claim authentication • the ability to segment regions, distributors, sales teams or departments into different groups to target them with specialized promotions When you track results, make sure you’re tracking not just one time frame vs. another, but comparing participants’ performance vs. non-participants’ performances. Comparing both sets of data could reveal that the incentive program still boosted performance, even if overall sales or revenue was down.
  11. 11. Compile customer data from incentive program enrollment forms and profiles participants fill out, as well as invoices and other sales claims documentation submitted to the program. You can use incentive technology to integrate your incentive program with your CRM system to facilitate back- and-forth customer data exchange, streamlining information and creating a more rounded picture of your customer base. #6 Gain more customer data and utilize it effectively. Customer and sales incentive programs lead to larger or more diversified purchases. Adding this information to your customer database can greatly improve your sales and marketing strategies.
  12. 12. With today’s online incentive technology and tools, businesses can power their incentive strategies with ample sources of data. You can use this data to tell the story of your incentive strategy, how and why it works and how this story aligns with your overarching company, business, marketing or sales goals.

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