Loyalty Programs Lure Even the Small Sales Networks

Sales-supporting programs are the driving force in terms of loyalty building and winning new clients – as the study “Wyzwania sprzedaży”, run in the 1st half of 2019 by the ICAN Institute in cooperation with the Edenred Polska, shows.

This is an upward trend from previous years. What is the reason behind it? To win a client and keep him/her becomes an increasingly demanding challenge for the entrepreneurs compared with the past. Thus, companies are opening up to new solutions “driving” sales – this is the reason behind the fact that loyalty programs are becoming increasingly popular, featuring high effectiveness and attracting increasing interest.

Only in 2018, as much as 67% of sales leaders exceeded their estimated sales targets by 20% owing to, inter alia, the implementation of loyalty programs. Currently, as much as 65% of the companies are developing sales-supporting programs, while 5% of the respondents plan to introduce them this year. Just for comparison – 3 years ago only 45% of the companies used the programs, while the still growing upward trend evidences their effectiveness in terms of building sales strategy within companies.

Why Do Companies Reach out for Sales-supporting Programs?
 

As they observe a fast and real return on investment. The loyalty programs help to optimise company expenses and maintain high motivation of the participants – provided they are implemented wisely.

Where to start?

  • You should first set your goal you want to achieve and the target group of the program.
  • At this stage, it is also crucial to define the budget, based on which you will structure your entire program.

Starting from an idea and an interesting and engaging project to a system of attractive rewards which provides each participant with a free selection and easy access to the rewards – in short, this is how the perfect program should look like, a program which will guarantee success to each company.

What Advantages Do Employers Expect from Launching Loyalty Programs?
 

97% of the respondents see a potential in them to increase sales and market share. 84% of them think that the programs help to increase and maintain client motivation, as well as assist the promotion of the company’s services and products – as 83% of the respondent companies point out. What is important, not only the largest enterprises recognise the effectiveness of sales-supporting programs, but also smaller companies from various market sectors.

An individual or a business client? Who is most frequently using the sales-supporting programs? The vast majority (91%) includes B2B segment clients, and every second program is dedicated to the B2C market. In case of business clients, wholesale (96%) and retail (78%) sales establishments predominate. Sales channels also play a crucial role in the implementation of the sales strategy of each company. The greater the motivation and support of the distribution network and sales representatives the better the performance of the company. How to motivate your sales channels?

It is crucial to rewards not only the most active high performers, but also the average performers, to increase their turnover. Creating the environment where each of them will be able to feel comfortable and appreciated by the company, will translate into their involvement in the program and a shared success.

Which Rewards are Popular within the Loyalty Programs?
 

Most frequently – rewards in kind (80%), prepaid reward cards (52%), as well as discounts and rebates (40%). The prepaid cards enjoy increasing popularity, both amongst the loyalty programs organisers and amongst their participants. It results from, for example, the functionality of the cards, namely the freedom of use and reward selection – the organiser decides when and on what conditions it will top up the card and the participant chooses the reward by himself/herself, perfectly fitting the limitless selection of rewards for the entire period of the program. For 98% of the companies the cards represent an attractive form of rewarding, enrich the selection of rewards (92%) of the companies, and additionally are user-friendly (66%).

Self-handling or with assistance? How to develop programs which guarantee success?

The research shows that every second company handling sales-supporting programs use the assistance of external suppliers. Professional service and advice (35%) as well as comfort (26%) are brought forward as the core benefit. Why? Because, the idea alone is not enough, while companies often lack adequate know-how, experience or time to take care of all its components. So, they choose a proven solution – cooperation with an experienced company which will comprehensively design the program and take care of all its components – such as the selection of adequate rewards, rewarding mechanism and program service. An effective loyalty program must actually engage the group of clients, contractors or employees. Thus, it is rather better to take care of its success by choosing external partners, than to expose the company to failure and drop in the loyalty.

The above-mentioned research was run by the ICAN in February 2019 amongst 266 sales managers and directors, from the production, service and trade-related sectors, employed by medium-sized companies (50-249 employees).

 

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