By Rebecca Brooks

Brands are most successful when customer needs and priorities are the focus. Traditionally, research and marketing has centered on a kind of narcissism, often making the expectations and needs of the target audience peripheral. This doesn’t work in today’s age of sweeping technological advancement and the consumer behaviors that come with it. Brands, and their reward programs, must resonate with customers and be relevant to those customer’s lives.

We know from multiple studies that to create attraction to a brand, brands must appeal to specific needs at a specific moment for that specific individual. Reward marketing has long been recognized as the ideal way to “surprise and delight” consumers in a meaningful way. Brands may assume they have connections with their audience, but their customers are actually in a state of inertia. Incentives and rewards can actively create those connections – as long as recipient needs are at the forefront of the outreach

We recently embarked on a study of those needs and priorities when it comes to how consumers perceive specific incentives and how those incentives influence behavior. Our study, done in partnership with Virtual Incentives, targeted a representative group of U.S.-based adults who had experience with a reward or incentive program. With a 15-minute survey, including open-end video responses from Voxpopme, we were able to get a clear look into consumer preferences surrounding incentives.

A couple of key factors we explored in the study were personalization and incentive preference. The moment that a person receives an incentive or reward can be very powerful, creating a magnetic instant when a bridge can be built between a brand and its target audience. But this moment truly hinges on if the personalization is thoughtfully included and if the incentive is what the recipient actually wants.

First, personalized incentives can help to drive perceptions that the brand cares about the customer and values their loyalty. Personalization runs the gamut from using a person’s name in the communication all the way to leveraging past purchase information. For example, if someone recently bought a washing machine, offers for soap, fabric softeners and other ancillary products would make sense for them. There was a small percentage of respondents in our study – around 16 percent – who found some kinds of personalization “creepy.” So it is definitely important to understand your audience and their acceptance level of incentives that are customized and targeted. In short, finding the right kind of personalization can help make the customer feel that his or her needs are valued, and even offer an opportunity for complimentary marketing.

Second, we found that people like what they like. No shock there, right? At a time when consumers have more options than ever before, the right incentive program can drive consumers to your brand, make them feel like valuable customers, and convert them into loyalists. Our research found that most consumers want virtual or physical giftcard incentives, with the majority (35 percent) preferring a digital Visa or MasterCard that could be used anywhere. Eighty-five percent of study participants were also active in points programs of some kinds, where the points could be redeemed later for goods or services, showing the ubiquitous nature of this style of reward. With the right rewards in place, the best customers will self-select into a loyalty program.

In order to leverage the right reward or incentives, it is vital to know your audience. Our study showed variant behavior based on gender, income levels and other demographics. But regardless of demographic differences 50 percent of incentives program users reported changing their behavior based on incentives (returning to the brand, making an additional purchase, spending a higher amount). It is vital to figure out the right incentive for a particular audience in order to leverage that loyalty program to its full potential. There’s no doubt that a reward program is worthwhile: 3 out of 5 of our respondents said incentives improve their brand opinion, and 4 out of 5 say it would make them want to purchase from that brand in the future.

With a new consumer that’s constantly on the move and overloaded with information, whose needs vary widely based on their momentary circumstances, rewards and incentives can create important connections. These magnetic moments, when a brand truly has a chance to make a lasting impression on a consumer, are becoming harder and harder to achieve as brand loyalty becomes a thing of the past. The right incentive program can still drive consumers to your brand, make them feel like valuable customers, and even offer an opportunity for complimentary marketing.

For more information, a white paper on the study can be found here.

By Rebecca Brooks, Founder, Alter Agents