The Power of Points-Based Incentive Programs

Managers face a blur of options when forming strategies to reach objectives like increased sales revenue, improved employee productivity and stronger customer loyalty and share of wallet.  While incentive-driven solutions have a good track record for delivering results in these applications, the sheer number and wide variation of program formats can make them difficult options to evaluate.

Over the last three decades, Loyaltyworks has designed and managed many types of incentive programs. Each approach has its merits and in many cases some program designs simply fit specific situations better. But we’ve concluded that one format has consistently delivered the best results for clients (and in the broadest range of business applications) – points-based incentive solutions.

If you are considering a business incentive solution of any sort, we suggest that you take a look at points-based programs. In our experience we’ve found them to outperform other reward program formats because they:

• effectively motivate a wide variety of participants,
• adapt quickly to changing company needs, program objectives and audiences, and
• accumulate valuable data and are highly measurable.

A well designed and managed points-based solution that offers a rich array of rewards gets participants invested in an ongoing relationship with your company. Moreover, it gives you the benefit of highly accurate data compiled from actual behavior motivated by the program.

Drive Participation, Create Impact
A significant advantage of points-based incentive programs lies in the nearly universal appeal they have with participants and their ability to sustain interest over time. Add powerful communications and the capacity to involve large audiences and you have a program that can make a substantial, positive impact on business.

Popular, Proven Incentive
Participants are well acquainted with—and respond enthusiastically—to the reward models behind most points-based incentive programs. The same basic concept underlying the popular, consumer “Frequent Flyer” programs is simply broadened to other types of transactions, where points are awarded for specific actions or behaviors. Points represent a branded, proprietary currency that participants earn, accumulate and redeem for rewards – which can be anything from trips, sports equipment and jewelry, to gift cards…you name it.

Long-lasting Participant Interest
Compared to other incentive formats, points programs demonstrate a superior ability to sustain high levels of interest and participation over extended periods of time.  As they earn points (and build equity in accumulated reward value) most participants develop a vested interest in the program. They become increasingly motivated to earn more points, thereby protecting and adding to the value of the points they have already accumulated. These behavioral factors keep program participants engaged and responsive far longer than your typical sales promotion.

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