Rewards strategy to drive redemption and engagement 

A loyalty programme's rewards catalogue is crucial to its success, so why do so many fail by offering the unattainable or the uninspiring? The authors of The Loyalty Guide report posed this very question to loyalty marketing consultancy Accentiv'. 

According to Accentiv', countless marketing academics have hammered home the concept that rewarding best customers drives their behaviour towards a brand. And yes, rewards are a crucial part of any customer loyalty programme - so why is it that the customer loyalty programme's rewards catalogue is perhaps the least well understood and most neglected part of the loyalty tool kit? 

What marketing managers have to understand is that the rewards catalogue is the most important weapon they have at their disposal, mainly because it can influence participation levels and therefore the success of both customer and partner relationship management programmes. 

The approach to the rewards catalogue is often ad-hoc: it's either relegated to the redemption manager to put together the best catalogue he can manage at the time of the programme, or it might be arranged over a coffee-and-biscotti meeting between the marketing manager and the loyalty manager (i.e. a couple of options are presented and after some basic questions like "Is it attractive to my target audience?" the team quickly wraps up the catalogue so the programme can be rolled out). And therein lies the tragedy. 

A rewards catalogue has the potential to greatly influence a loyalty programme - either for good or for bad. Just as a well conceived and properly constructed rewards catalogue can boost response rates phenomenally, a badly constructed one can drive response rates down drastically. 

But the impact doesn't end with response rates. In the mildest cases it can lead to what is known as "redemption inertia" (where participants in the programme accumulate enough points but never redeem them because the rewards just aren't exciting enough). In more severe cases it can result in poor participation rates, high attrition in the programme and - most importantly - high levels of irritation among programme members. Needless to say this will adversely affect future initiatives and probably derail the whole relationship management exercise.