
Rewards Programs Overview
Rewards marketing programs, also known as affinity marketing programs, provide a value to a set client base as a core value. A range of "special deals" and/or discounts are arranged with vendors and then made available to a company's clients. Exclusive offers typically have higher value to your clients. In some cases the vendors who participate pay fees or commissions. The principle focus is to provide a value add to current clients and a differentiator for the company offering the program from competitors.
Creating the Win/Win
Affinity programs need to focus on a winning value proposition for both the vendors offering special programs and to the client base who would use the program. Ideally vendors will offer at least a slightly better deal or discount
than commonly offered. If it is the same or standard discount that someone can secure on their own then the deal
has less value and is less likely to be used. Vendors need to find an opportunity for new customers. The affinity program is a sales opportunity and ultimately needs to be a long term positive revenue opportunity. Deals can be one time (i.e. 50% first time purchase discount) or ongoing (i.e. show your affinity membership card and get 15% off every purchase).
Goal Setting
Up front you need to determine the goals of your program. Goals are specific to each company but here are some common goals:
- Increase client retention
- Increase conversion of potential clients to actual clients
- Improve competitive differentiation
- Generate good will with clients
- Ultimately creating metrics around your goals will give hard action items in creating a program (i.e. increase client retention 3%, increase sales conversion by 2%, etc.)
- Program participation goals are important as well (i.e. 10% client participation in the first 6 months of the program offering, etc.)
Designing the Program
Generate a list with categories of vendors appropriate to your client base. It can be useful to rank that list in order of importance to your clients. You also need to decide how many vendors you'd like in each category. Remember that exclusivity (one vendor per category) can be a big selling point as you recruit vendors. For larger client bases,
especially demographically or geographically diverse client bases then having multiple vendors may be important because of service area and service type limits.
Create a Summary of the Opportunity
Any affinity marketing program should have a concise document to present to potential vendors which includes:
- A summary of your company (i.e. who you are, what you do, how long you've been around, etc.)
- A fair amount of detail about your client base is important including numbers, turn over, geographic location,
income profiles, etc. - A description of what you are looking for from vendors (i.e. coupons, discounts, one-time, on-going, etc.)
- Value proposition to vendors (i.e. online, print exposure, new to a geographic area potential clients, large
client base, high income client base, etc.) - Any fees and/or commissions
Create Mock Ups of Promotional Opportunities
Create online and/or print mockups to hand over. These could include html email blasts, online web profiles, brochures, membership cards, key chains, etc. DO NOT overlook the power of tangle items. Everyone loves the web but in convincing vendors to participate in a program they love to see and hear about brochures, direct mailing pieces, trade show booths, gift baskets, etc. Given the digital age, "old school" tangibles can be a big plus for some vendors.
Create An Application
An Affinity Program should have a simple application that includes contact information, coordination person, discount offer, description of the business (used in promotions), etc. A more sophisticated program may have a legal terms of participation. Unless you have a very large organization (i.e. Costco) try to make this a simple one page document with key points like termination for lack of service quality, etc.
One of the Easiest Sales Calls
If you prepare the outlined affinity program overviews, examples and applications then selling an affinity marketing program is one of the easiest sales calls you can make. Businesses want more customers and you have more customers to offer. It's simply a matter of presenting an opportunity and seeing if a vendor is interested. If you have low or no fees to participate then there is almost no barrier to participation. BUT remember that you need to evaluate the vendor as much as the vendor needs to value you. Can the vendor provide a good service level? Will there be lots of confusion on the affinity discount? Is their product and services a good fit and a good value to your customers?
On-going Management
Remember on your team someone needs to be the chief contact. When your customers have specific questions or vendor complaints there needs to be a principle person to handle the questions and issues.
Someone should also be touching base with vendors to get feedback on a 3 - 6 months basis at the minimum.
Scaling a New Program
For those creating an affinity program for the first time limiting scope can be helpful. You may want to start with just a handful of vendors or a limited segment of your customers. You plan, implement, revise and then scale up your program. Sometimes having successful vendors can be a key in getting better vendors down the road with bigger promotions and discounts. Vendors love to hear about successful returns for other participants. They immediately start translating those successes to their own business and revenue models.
Market to Your Client Base
Your program needs to be promoted to your client base. Look for low cost opportunities by piggy backing your current communications to your clients:
- Educate everyone in your company about the program and its key benefits and give them the simple steps if a client wants to participate
- Add to your web site
- Include in your mailers
- Have your sales people and employees talk it up
- Send direct mail
- Post table tents, fliers, etc.
- Change the on hold messaging
- Have the receptionist greet on the phone "XYZ Company, have your tried our great discount program yet?"
Create Your Tracking Metrics
Create the criteria by which you judge success:
- Number of Vendors
- Number of Online Sign Ups
- Coupon Use
Vendor New Sales Totals
The more quantitative you can be the better you can judge, revise and improve your program. It also makes it increasingly easy to recruit new vendors.
Here is the article as a PDF:

rewards_marketing_programs_overview.pdf |