Increase

It was about 10 years ago at this time that I was sitting at my desk when the receptionist called me to ask if I had time to see a salesman that had stopped by to see me without an appointment. Whenever this happened my pat question was “what’s he peddling?” “Incentive programs” she said……Incentive programs? At that time I was the vice president of a pretty high profile multi-branched construction equipment supply and rental distributorship in the upper Midwest and did much of the purchasing and almost all the promotional and marketing programs……but incentive programs? Why not I thought. So a gentleman by the name of Tom was sent down the hall to my office.

As was customary for a “hardened” purchasing agent like myself I listened to Tom’s sales pitch with the usual skepticism and doubt, but as he continued his presentation my interest began to increase and my imagination and marketing juices began to flow. He used the terms “loyalty programs” and “incentifying your customers” which was something that I had never really heard of, but after more conversation began to embrace.

He talked about 2, 3 or 4 day drive away weekend family vacation packages that we could reward our customers with for doing business with us and increase sales and margins at the same time. He threw some research based statistics out that 93% of Americans prefer travel over other incentives, that 87% of travelers drive, and that 91% of Americans drive 1,250 miles round trip and vacation an average of 4.1 days at a time. Those numbers helped me realize that these short “drive-aways” really made allot of sense. We could push different product lines, incentify rentals, or get extremely creative on how we could go to market. He talked about a wonderful 4 letter word he knew would also help us and that is “co-op”. By using manufacturers co-op funds we could halve our costs on these incentive packages, which cost between $100 and $295 each, and get a cost to perceived value ratio up to about 7 or 8 to 1. In essence we could offer a vacation that after co-op cost as low as maybe $75 to our customers who valued it as high as maybe $500. WOW, that really got my attention. Nobody had ever done anything like this in our market in the 20 years I had been with the company ….so why not? I always loved being the first one to try something new and thinking out of the box was always fun.

So we gave it a shot. On our next quarterly flyer that we sent out there were a number of different products that included a free drive away vacation on it…..and you know what? It worked and it was very easy to administer. As time went on we added more and more products with those incentives and began to differentiate ourselves from our competition. We also rewarded our own salespeople with these “drive- aways” for different types of performance and they loved it just as much as our customers did.

We ran with that program successfully for about 3 years when a new loyalty/incentive program came out known as a points program... or what we ended up calling it….our “miles” program. Quite simply, we rewarded our customers with points or miles for buying or renting anything from our company. Then when they accumulated enough miles they could chose from hundreds of different types of merchandise, travel or sporting event awards out of a very extensive catalog.