Customer Award Programs: The Benefits and Pitfalls

A customer is the best critic your business can have.

So, it’s critical to engage your customers in a consistent and respectable manner to get suggestions, feedback, testimonials, and, eventually, brand advocacy.

The National Bank of Oman, for instance, launched an “NBO Customer Consultant Award”, which consisted of a cash prize and certificate to customers who provide innovative ideas that help the bank improve the quality of its products and services in specific core areas. All the customers need to do is to email their innovative ideas. A simple contest that yielded valuable and business improving results.

Offering incentives for customer engagement has many benefits. In most cases, the suggestions that come in and interactions that take place, directly from the intended audiences, are a thousand times more valuable than what a third-party consultant would suggest, and the award doesn’t even cost a fraction of a professional consultant’s fees. The winning customer feels that the company cares, and others get a feeling that the company values honest and positive feedback.

However, one pitfall to be aware of is running an incentive scheme correctly because, if not done right, it could end up being counter-productive, doing more harm than good.

The main risk is “loser” resentment. Losing the prize, even if not substantial, may cause some customers to develop resentment against the company for valuing the “other” suggestion over theirs. The solution: provide clear, detailed terms and conditions, and make transparent the evaluation process. Leave nothing to ambiguity. Transparency always garners respect. Also, rather than a competition, install multiple suggestions, awarding anyone who contributes something worthwhile, rather than just the top one or two suggestions.

Either way, engaging your customers to provide their thoughts will instill a sense that you care about what they have to say. What are some ways that you engage your customers to receive feedback?

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