14 Feb 10 Ways to Boost Results With Rewards
by: David Swanson, CEO, Loyalty Solutions
It’s official, and it’s compelling. Data from 2016 shows that, for the third year in a row the number of energy companies utilizing rewards and reward programs increased by triple digits. That level of growth, spread over that period of time, suggests that the use of rewards in the energy space is now more a long-term standard than a short-term trend. Why are more and more energy companies turning to rewards? The answer is simple: They work.
Modern reward programs and modern reward strategies are compliant, cost-effective, customer focused, data driven, ROI justified, and proven performers. They blend seamlessly with an energy company’s core marketing messaging, unlocking a whole new world of value-focused, savings-focused, and customer experience-focused communication. In a highly competitive, noisy, and commoditized marketplace, rewards offer energy companies the opportunity to differentiate, break through and catch a prospective customer’s attention, and motivate them to action.
The most popular reward approach for energy companies in 2016 and in 2017 is the branded reward program. Branded reward programs feature the sponsoring company’s full brand identity and maximize the impact, effect, messaging opportunities, and application of the rewards. These programs don’t break the bank either. At roughly 0.5% of the average customer’s gross monthly bill, they cost far less than traditional incentives like bill credits and rebates, and demonstrate annualized ROI of well over 1000%. Most compelling about a branded reward program is that it offers the sponsoring company ten ways to improve performance.
- Rewards Increase in Sales Conversions by 10% to 25%.
- Rewards Improve in Upsell / Cross Sell Conversions by 20% to 30%.
- Rewards Boost Customer Satisfaction.
- Rewards Increase Customer Engagement by 50% to 150%.
- Rewards Improve Renewal Rates by 8% to 18%.
- Rewards Extend Customer Persistency/LTV by 5% to 15%.
- Rewards Improve the Customer Save Rate by 5% to 10%.
- Rewards Increase Customer Re-Engagement by 15% to 25%.
- Rewards Reduce Credits, Refunds, and Discounts by 20% to 30%.
- Rewards Increase Revenue Per Customer by 12% to 22%.
The best thing about these ten ways rewards can help improve performance is that you don’t have to choose just one. The most effective reward programs are ones where the rewards are integrated across the sales, customer service, customer communications, and renewal processes. The result is a customized and compliant program that reflects well on your core brand, builds goodwill, provides value to the customer, and boosts the bottom line.
Here are a few tips if you’re considering rewards:
- First, do your due diligence and choose your provider carefully. Not all rewards are created equal.
- Second, ask questions about compliance. The regulatory environment in which energy companies operate demands a high compliance and quality standard that few traditional reward companies provide.
- Third, look for extras. The stretched resources and priorities within energy companies themselves mean the best reward providers will offer extra services in support of their rewards like scripting, training, website development, reporting, customer communications, artistic design, etc., all geared to help you make your reward program a success.
- Fourth, test first. You don’t have to give rewards to every one of your customers all at once. Good reward providers will work with you to craft a test campaign to validate and prove out results.
- Fifth, don’t overpay. You can get quality rewards for well less than $1 per customer per month.
- Sixth, shout it from the rooftops. Once you’ve got a reward program in place, it’s an incredibly valuable asset that should be leveraged as much as possible with your customers to maximize impact, and a good reward provider will help you develop a communications plan to do just that.
- Finally, set clear goals and make sure your reward provider is providing you with regular reporting, metrics, and analytics on those goals.
By all accounts, 2017 is going to be a banner year for rewards in the consumer retail energy market. If it’s been a while since you last explored rewards, consider taking a second look. You’ll be surprised at how much has changed in a very short time and how targeted, effective, efficient, and impactful they can be at helping to improve results.
David Swanson is CEO of Loyalty Solutions, a division of Optimus. Loyalty Solutions is located in Shelton, Connecticut and specializes in rewards, reward programs, and reward logistics for energy, banking, healthcare, telecom, and retail product partners.