It shouldn’t come as a shock to hear that data analytics is becoming an increasing necessity for the modern business, whether B2B or B2C. Even in the incentive loyalty space a 2018 study found that a whopping 89% of B2B marketers surveyed agreed. But, don’t think it’s just marketers: the Harvard Business Review noted that same year that data has become paramount in B2B selling as well.
By: Laura Broman
We’ve seen it here at HMI. Over the past several years, there has been an increasing shift in companies like ours towards a data-driven model of doing business. Evolving consumer expectations and advancements in technology have increasingly led to decisions being made based on the data. As a company that designs incentive programs for B2B businesses around the country, we use data to stay informed at every step of the incentive design journey. Today, let’s go through that process and see just a few of the many ways data has improved the incentive process.
Data from the start of the incentive loyalty program…
Data plays a huge role in shaping an incentive loyalty program from the outset. As an example, let’s say a mid-size B2B distributor has just partnered with HMI to initiate a points program for their channel partners. Even before the program kicks off, that client probably has a lot of useful data on their target participant group that will help guide its design: transaction history (frequency, quantity, and variety of purchasing), user profiles on ecommerce platforms, or any other quantifiable behaviors.
Using that data, we’ll then craft a program strategy that breaks the client’s target group into different segments, sometimes altering the program between the segmented groups to make it more effective overall. Participants might be segmented by region, products purchased, previous year’s purchase total, and so on, depending on what goals or KPI’s our B2B distributor has for their incentive strategy, such as increasing sales revenue, building product knowledge, or widening the variety of products purchased.
…And at every step after
Broadly speaking, when an incentive loyalty strategy begins, there are three areas we use data to track and improve performance: enrollment, engagement, and redemption. There are a lot of different ways to design a points program, but they all include those key components.
Let’s say our B2B distributor’s incentive loyalty program strategy launches with a target enrollment rate of 70 percent of invited customers. Within a few months, it will become clear from the numbers how well things are going: is the current enrollment rate at or near what was expected, or was it lower? Unsatisfactory enrollment rates often point to some gap in implementation strategy: perhaps the pool of channel partners targeted needs to be widened, or maybe it’s time to get the client’s internal sales team involved in getting the word out to folks. The client could also try implementing a new program component, such as a gamification feature or a refer-a-friend campaign, to spark renewed interest in those program invitees who have not enrolled.
Next in our B2B distributor’s timeline is engagement: maybe they hit that 70 percent enrollment level without a hitch, but that still doesn’t mean things are perfect. What if the participants are enrolled but not doing any of the behaviors the program is designed to reinforce, like completing a training module or increasing their sales of a certain product?
This is a pretty common problem, actually: one of the most frequent challenges new programs face is that a lot of their program invitees sign up but never take that crucial next step of actually getting involved.
Keeping track of participant data can help identify solutions. If participants are enrolling but nothing beyond that, our B2B distributor might try offering a point bonus right off the bat just for signing up to stoke their excitement about the incentive loyalty program. If participants are engaging in the first couple weeks but dropping off later on, they might try a “we miss you” email campaign, or they might look into whether the program structure is overly complex or unwieldy. A new special promotion could grab the attention of longtime participants who are looking for some novelty in the program. Or maybe these participants have been seen to put more trust in person-to-person interactions with their channel partners than they do in automated email reminders, in which case our B2B distributor might try implementing some engagement strategies for their sales team.
The final area we’ll look at occurs simultaneously with engagement: redemptions. Another common challenge in points programs is how to keep participants engaged in the long term. A participant may be relatively engaged with the program for a while, but that engagement is likely to drop off if they’re not actively redeeming the points that they earn for rewards.
Participants need to feel like they’re being rewarded for their hard work, whether it’s learning a new skill or selling more product, and often if they don’t end up spending their points they don’t feel like they’re being truly rewarded, and they won’t feel motivated to keep doing it. If the data indicates that participants are not sufficiently redeeming their points, we and our B2B distributor client will need to brainstorm solutions. We might try an email campaign that segments participants by amount of points earned, encouraging them to redeem for prizes of corresponding levels.
There are numerous ways to make use of data in an incentive loyalty program, but one thing is for certain: as businesses continue to evolve and grow, being able to understand and use data will only become more essential and more valuable. No matter what kind of loyalty programs you run, your program users are expecting more personalized preferences, offering, messaging, rewards, etc., and data is the start of that journey. How far you can go depends on how well you are prepared on getting your data sorted. Data is here to stay; the only question is how you use it.
Recommended Read: How World Events Impacted the Future of Loyalty Marketing During 2020
Laura Broman is a freelance content writer for HMI Performance Incentives and video editor based in Los Angeles, CA. She is currently pursuing her Master’s degree in Cinema and Media Studies at the University of Southern California.