This year has been defined by challenges and how we overcome them. For B2B vendors and manufacturers, it has been no different and those who have adapted and taken a strategical approach to how they do business have been able to withstand threatening conditions.
When economic factors become difficult, too many businesses resort to price cuts. This, in the hope to drive more sales and attract new customers away from competitors. Unfortunately, they find out that price cuts aren’t sustainable. Furthermore, it puts them in a vulnerable situation. Especially when the competitor has not dropped their prices, but their offer draws more attention.
A more resilient approach is to add value to your products and services. It’s critical that your brand dodges the low-price trap. You ou can do this using the power of incentives to engage with distribution channels and spur sales. Merchandise rewards are a great option in your “toolkit” of incentives. They can give you the reason to move away from deep discounts and shift the conversation to benefits.
Strategically designed programs are flexible and can adapt to changing market conditions. Especially when it is likely that customers will look carefully at how they spend their dollars. And make the most of their purchases.
Customers not only get value from the products they buy, but also earn program points which they can redeem for merchandise rewards.
Their purchases may also build “status” in the rewards program, giving them exclusive access to further rewards and benefits (i.e. “VIP Members Club” for those who reach certain levels).
As you purchase merchandise rewards at wholesale prices, your reward budget goes further, allowing you to get extra value from it. And participants can redeem rewards with high perceived value vs actual cost.
Set sales benchmarks so you only pay out rewards after certain criteria has been met. This helps protect how many points you spend in a catalogue, as well as link that spend to the lifetime value of your customer. You also have access to points accrued and redemptions reports, which shows your liability and redemption behaviours so you can keep a tight rein over your budget and program.
A well-designed merchandise program makes you money. These typically work in the form of rebates or point liability reduction, delivering savings around point values paid out. You buy at wholesale prices and add a rebate value to the cost of the goods. These also help demonstrate the value and link to ROI and sales generated through the program.
When program participants earn rewards from your incentive program, they feel fantastic. They not only feel they’ve achieved something, but they often boast by telling others, like a trophy earned in a sports contest. They display it and can brag about it!
Having a merchandise rewards catalogue in your incentive program opens up the scope to target any demographic in your customer base and distribution partner channel. Merchandise is relatable, and almost anybody can find something in the catalogue they might like. With that wider choice, you give participants a higher chance to find rewards that suit their lifestyle, which boosts motivation. From sporting gear and electronics to kitchenware and personal items, merchandise rewards have something for everyone.
When your customer sets their sights on a certain reward, it can be a huge win for your program. I.e. For customers who love cycling, it’s a no-brainer to aim for a $4,000 road bike on offer in your program. Through regular emails, you keep them up-to-date with their progress and suggest other sales activities they could do to reach the bike even quicker. This goal setting feeling can also be applied to levels of status: for each level a participant reaches, it feels like they’ve climbed to a higher and higher summit!
Merchandise rewards offer your participants the chance to choose a reward that is appropriate for them. Specifically, your program presents rewards that give your customer immediate value with something they need, instead of something they want. Depending on the financial state of your customers, these offers could be simple household needs, like kitchen appliances, compared to “nice-to-haves” like expensive watches. Your merchandise rewards catalogue becomes empathic and solves needs (especially during a tough period as recent times), which makes it a positive for both you and your customer.
Just like in any online retail environment, merchandise can drive engagement with hot deals. Discounted point values or limited quantities of desired items can be big motivators! The benefits of hot deals in your program mean that participants feel there’s a great deal to be had and are more likely to act on it. You can also drive marginal sales by tying points to special products and offers, which lets you deliver higher perceived value.
Something that always goes down well with participants is that merchandise rewards are delivered soon after redemption. This is in stark contrast to other rewards, such as monetary cash-backs, where processes take time, or travel rewards, which occur at a later date (and at the time of writing this article, aren’t even possible due to covid). Merchandise rewards fulfilment generally has a short step between reward-redemption and reward-reception. Participants order online, an order is generated, and in a matter of days, is delivered to the participant’s door.
An incentive program opens up a direct line with your partners and customers. Alongside incentive program messages, you can use this to announce new products or services and promote sales. If you know what rewards customers want, you can tailor messages to get a higher response, compared to generic broadcasts. When you do that, you tap into self-interest and desire, and your emails are more likely to be read.
In recent years B2B incentive and reward programs have moved away from merchandise rewards and more towards travel or store and prepaid gift cards. But in economically trying times and a post-COVID world where travel is highly limited, merchandise should be back on the table of options to consider.
Merchandise offers an adaptability other rewards struggle to deliver. Being able to tie merchandise rewards into a defendable and well-designed program delivers more value in your offer, makes your product resilient and gives you an advantage which competitors may not have.
If it is time for a closer look at what merchandise could do for your rewards program contact us