Points-Based Incentive Programs Edit

Managers face a blur of options when formulating strategies to achieve business objectives like increased sales revenue, improved employee productivity, stronger customer loyalty and share of wallet and the like. While incentive-driven solutions have a good track record for strong results and ROI in these applications, the sheer number and variation in program formats can make them difficult options to evaluate.

There are many different types of incentive programs and each approach has its merits – some designs simply fit specific situations better. That said, over time one particular incentive format has consistently delivered the best results to clients over the broadest range of business applications – points-based incentive solutions.

Points-based incentive solutions typically outperform other reward program formats because they:

    • Effectively motivate a wide variety of participants
    • Adapt quickly to changing company needs, program objectives and audiences
    • Are uniquely "data-centric" and inherently measurable

A well designed and managed points-based solution that offers a rich array of rewards gets participants excited and invested in an ongoing relationship with your company. Moreover, it gives you the benefit of highly accurate data compiled from actual behavior motivated by the program.

Drive Participation, Create ImpactEdit

A significant advantage of points-based incentive programs lies in the nearly universal appeal they have with participants. Add to that a set of effective communication tools and the capacity to involve large audiences and you have a marketing tool that can create a substantial positive impact.

Popular, Proven IncentiveEdit

Participants are well acquainted with—and respond enthusiastically—to the reward models behind most points-based incentive programs. The same basic concept underlying the popular, consumer “Frequent Flyer” programs is simply broadened to other types of transactions, where points are awarded for specific actions or behaviors. Points represent a branded, proprietary currency that participants earn, accumulate and redeem for reward choices, which can be anything from trips, sports equipment, jewelry, to gift cards…you name it.

Participant ChoiceEdit

Everyone likes having options and points-based programs afford participants significant control over their rewards. Unlike a discount or similar offers, rewards aren’t limited to the products or services that the program sponsor sells. The participant is free to choose the rewards that they desire most—and they can choose to save their points for rewards in the future or redeem points for something right away.

Easy AccessEdit

Program communications and catalogs, personal point balances, reward options and redemption assistance are readily available to participants in a number of ways—via program Web site, e-mail, telephone, or paper statement.

Effective CommunicationsEdit

The very nature of an “accrual” type of program means that regular communication with participants is necessary and expected. And the participants in points programs voluntarily identify themselves, extend permission to you to communicate with them and tell you which method of communication they prefer. This open channel is a huge, direct benefit of running a points program – it allows you to market easily and directly to partners and customers enrolled in the program.

Additionally, participants are extremely receptive to communications that are delivered through the program: they actually welcome it. (There’s an old loyalty marketing adage that speaks to this effect: “Junk mail always gets tossed; the letter opened first is a participant’s statement from his rewards program.")

Broad InvolvementEdit

While group travel and other traditional sales incentives reward only a few (usually high-volume) customers, a points-based program has the capacity to involve a broader span of participants—such as mid-size customers with available share-of-wallet. Different groups who have unique objectives—i.e., employee, partner, end-user—can also be included in unified programs.

Adapt to Changing NeedsEdit

Points programs are extremely versatile. They typically feature program structures and platforms that are fairly flexible and adjust easily to align (and realign) with changing company needs and program objectives. Program award rules can be changed on the fly, online program communications can be refreshed, new participant groups can be added, completely new “behaviors” can be added, etc.

Program elements that are commonly adjusted can include:

• Program duration (long term/short term) • Special promotions (designed around frequency, products or target participants) • Discrete participant groups and subsets • Awardable activities and behaviors • Point award rules • Administrative organization and access • Program financial models • Exit strategy

Track and Report with Primary Program DataEdit

The most successful points-based incentive solutions employ a technology platform to support the program—one that provides participants with a program Web site to access their accounts and redeem points. The technology underlying points-based programs naturally accumulates useful participant information (entered when partners and customers are enrolled) and specific data on the behaviors and activities being rewarded (captured as participants are awarded points), all of which can be used to continually refine and enhance the program.

Most well-designed incentive systems feature integrated tracking and reporting tools that give administrators ready access to program data, which is often used to track the business activity being stimulated by the program and program ROI analysis. Conducting segmentation analysis on the participant base can also yield insight into customer value or employee behavior, as well as provide the fundamental information needed to execute targeted marketing campaigns and communications.


Points-based programs offer a terrific way to engage your customers, partners and employees in a sustained relationship. If you’re looking for a program that delivers results, allows for creativity in design and flexibility in execution consider a points-based incentive program. In the United States several service providers support points programs including Online Rewards, Loyaltyworks [1], and Awards Network.