What are Omneo Incentives?
Incentives are about acknowledging customer behaviour in ways that both the customer and the people that serve them can see. Traditionally referred to as a 'Loyalty Programs', Omneo moves away from this terminology in a bid to remove perceived (or in the case of Velocity or Fly Buys) a genuine separation between the 'program' and the core brand.
Omneo sees Incentives as an integral part of the brand itself - a critical piece of the puzzle for driving engagement, advocacy and long term customer retention:
- Existing customers spend 67% more than new customers
- Typically it costs business' 5 - 25 times as much acquiring new customers than it does to sell to existing ones
- The average company loses 50% of its customers every five years - Harvard Business Report
Incentive programs remove the need for an endless cycle of marketing campaigns, blanket discounts and eliminate the risk associated with continuously devaluing your business proposition.
Omneo member Incentives are broken down into two distinct categories: 'Financial' amounts or discounts earned as a result of particular behaviours, and 'Acknowledgement' non-financial awards given in recognition of actions and accomplishments.
Two distinctly different ways to reward and recognise customer behaviour that tap into age-old engagement and motivation theory of Status, Access, Power and Stuff; not all people are motivated by remuneration nor by recognition, but often be a combination of both. The complexity in creating incentive programs often lies in business decisions about which behaviours are worthy of specific incentive types; the answer depends on the nature of the customer and business.
"Customer loyalty occurs because customers' purchasing behaviours become driven by their feelings for the company, not vice versa. Targeting customer behaviours while neglecting the emotional component of customer loyalty is a mistake far too many companies make." - Guy Winch, The Psychology of Customer Loyalty
Incentive programs don't operate in isolation of the broader business but as a component of a wider customer experience effort. All interactions a customer has with a brand will impact how they choose to (or not to) interact next. Incentive programs aren't a catch-all; they're about investing in and rewarding your high-value and frequent customers.
Getting Clear on Incentive Program Objectives
Businesses often start a customer incentive program with the simple goal to "boost sales" and while increasing sales isn't wrong, digging a little deeper on what you're hoping to achieve means you can:
- Target the right people
- Communicate to stakeholders
- Offer meaningful incentives
- Allocate a budget
- Determine the rules and processes
- Track progress
- Measure and get feedback
Incentive programs change behaviour because they invoke psychological engagements and emotional connections between customer and brand.
Metric Examples: Shop Frequency, Interaction Frequency, Customer Profile Completeness, Guest Checkout Rate, Average Transaction Value (ATV), Average Annual Value (AAV)
When members redeem Financial incentives for valued products or services, they experience feelings of satisfaction and success. Similarly, Acknowledgement provides status and privileges to members and a sense of exclusivity.
Metric Examples: Higher NPS or CSAT scores, Product Reviews, Tier Churn Rate
Competitive Advantage & Differentiation
88% of businesses with incentive programs are more profitable than their competitors who do not employ this solution (Deloitte)
Metric Examples: Qualitative Survey Data, Market Share, Member Growth, NPS
Incentive programs are about developing and nurturing known customer relationships when customers feel seen and acknowledged they feel more confident and positive in interacting with your brand.
Metric Examples: Email Opens, Cart Abandonment, Redemption Rates, Interaction Frequency
Advocacy & Referrals
Customers that are engaged and feel satisfied with your brand will become advocates for it - increasing the likelihood of new customers.
Metric Examples: Social Shares, Sent Invites, Member Growth, Reviews
Where do brands go wrong in implementing Incentive Programs?
- Failing to get buy-in and communicate across the organisation
- Not investing in the right technology
- Incentives are not meaningful enough
- Program rules are hard to follow
- Lengthy onboarding process
- No dedicated team or resources
- Rewarding all members equally
What consumers see as crucial in an incentive program: Ease of redeeming rewards (55%); ease of earning points (51%); monetary rewards (51%); access to exclusive deals and coupons (36%), easy enrolment options (22%) - mintel.com
Often the best way to kick-off an incentive program is to make sure the program is simple, clearly defined so that it can be easily managed - this ensures you remove the complexity associated with communicating it to customers, stakeholders and staff and reduces barriers for uptake. Think about yourself as a customer engaging with a brand you love, is it clear how the brand wants you to interact with them in order to reap the benefits of the relationship? If not, they've missed the mark.
Creating an incentive program isn't just about determining what tiered point structure you're going to put in place, but rather about defining what an ongoing mutually beneficial relationship with your best customers looks like.
Need help getting started with your Omneo Incentive Program? We'd love to hear from you.
Read more about Omneo Incentive types below: