At Loyalty360, we’ve been hearing a lot lately about the importance of unique customer experiences. Representatives we speak with often say that frictionless experiences are major drivers of loyalty. Recently, however, we heard from one representative who suggests that brands shouldn’t be neglecting incentives as they create these experiences. That representative is Matthew Kates, Chief Marketing Officer for PrizeLogic. 
 
This bit of insight comes on the heels of two reports published by PrizeLogic, the Incentivized Engagement Report and the Prizing Engage Report. The first examines the role incentives play in relationship building and engagement efforts across various forms of marketing. The second offers insights on how different types of prizes influence consumer participation in promotions.  
  
Could you explain the research reports you’ve published in the last two years? 
 
The Incentivized Engagement Report provided insight into how brands can leverage different types of incentives (loyalty points, sweepstakes entries, rebates, etc.) to motivate a wide range of consumer behavior across the customer journey. The Prizing Engage Report delved into specific types of prizes (vacations, electronics, entertainment, etc.) and prizing constructs (aspirational, attainable, frequency, etc.) to influence the likelihood of consumer participation. 
  
Are you seeing an evolution in customer behavior? 
 
One area that’s evolved over the last decade is the appeal of electronic gadgets to older consumers. Not too long ago, the appeal of these items used to diminish as you progressed from people in their teens and twenties to people over 50 and 60, but that’s not the case anymore. For example, the prospect of winning a smartphone is just as compelling to 60-year-olds as it is to 18-to-29-year-olds. In both age groups, 80 percent would participate in a program for the chance to win. 
  
In reviewing the findings of the reports, did you have any ah-ha moments?  
 
There were so many interesting moments, but the following three were my favorites: 
 
  • Bigger isn’t always better. We found that a $100,000 grand prize results in a nearly identical participation rate as a $1 million grand prize. 
 
  • You’ve got to appeal to higher incomes. $100,000-plus households were just as motivated, and in some cases more motivated, to participate as lower income groups for a chance to win a prize. 
 
  • Success is in the details. Choosing a relevant and compelling prize category is only the beginning. The specific incentive can make a big difference. For example, offering a vacation package might be the perfect way to entice your target audience to participate, but the destination itself matters too. For instance, 50 percent more people said they would enter an online chance to win a cruise getaway than a ski trip. 
  
As marketers, do we tend to over complicate things?  How do we keep it simple when we have so many factors to include?  
 
Because of continued technology advancements and new platforms, marketers sometimes focus too much on creating amazing experiences and at times overlook the importance of the incentive in motivating consumers to participate in the experience. The competition for a consumer’s time and attention is so intense that you may only have a few seconds to convince a consumer to participate (hence the billboard test). Focus the initial call-to-action message around a simple yet compelling value proposition. Once you get a consumer to lean in, you can expand your message. 
  
What are some of the trends you’re seeing in this space? 
 
A big one is the continued movement toward digital prizes and rewards over physical ones. There are three reasons for this: 
 
  1. Instant gratification. Think of the experience of opening a box of cereal with a prize inside versus mailing in and waiting several weeks to receive that prize. 
 
  1. Lower costs. Digital rewards eliminate fulfillment costs, which can be an especially significant percent of budget for lower ARV rewards. Additionally, faster digital fulfillment typically leads to lower customer service inquiries and cost. 
 
  1. New options. The growth of digital prize options has been exponential, and there are new options such as giving away a company’s stock. 
  
If you could offer one final piece of advice on how brands should incorporate these learnings into their initiatives, what would it be? 
 
Think of your budget holistically when designing your program. There are often budget-neutral opportunities that can increase performance and ROI. For example, there may be an opportunity to create a less expensive yet more compelling incentive construct and then reinvest the savings into media to increase awareness and participation. 

 

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