QUALIFYING AND SEGMENTING CUSTOMERS
It’s both an art and a science to determine which customers should be eligible for which forms of incentives. Of course, this can (and probably should) also have a subjective level of evaluation to complement an otherwise objective and formalized process. Judging situations on a customer-by-customer or case-by-case basis and empowering frontline staff and/or executives to make these calls is a more advanced form of prioritization and selection.
To assist you with this due-diligence discovery process, I’d suggest quantifying and weighting customer actions against the following levels of submission:
• Referrals from a customer—indirect value
• Actual business as a customer—direct value
• Status as a customer—loyalty
• Tenure as a customer—longevity
Based on the weighting and prioritization you allocate to these respective categories, you’ll also want to think about what kind of reward you attach. Market Research from both Visa and MasterCard concluded the following: When rewarding people for a job well done, use cash; when recognizing specific behavior or achievement, use noncash. Ultimately it’s a combination of the two; however, the rule of thumb is to favor noncash rewards for longer-term performance versus cash for shorter term performance (easy come, easy go).
As you can see, this isn’t a one-size-fits-all approach. And while you may still not be 100 percent comfortable with this yet, there are a wealth (pun intended, I guess) of different ...