It may seem like a silly question, but it happens more often than you might expect: your business implements a company rewards program, has a lively launch campaign, and before you know it, your happy participants are redeeming rewards left and right. In fact, the redemption rate is higher than you expected… much higher. You begin to double-check your budget, wipe the sweat from your brow, and lose sleep at night—okay, hopefully it hasn’t gotten to that point yet!
If you’re in this situation, your company rewards program likely uses the bill on redemption model; that means that you only pay for digital reward points as your participants redeem them. This is a great option for most businesses, because it means that you’re not pre-paying for reward points that go unredeemed. The downside is that if you don’t properly manage your point distribution, you run the risk of drastically overshooting your budget as you (accidentally) shower your participants with rewards.
If this all sounds familiar, don’t panic! There are plenty of ways you can tug the reigns and get your way-too-successful rewards program back under control.
- Establish Clear Guidelines for Reward-Worthy Behavior
Have a meeting with the people or departments who have been given the power to award points—be sure that everyone is on the same page with regards to what behaviors and goals are deserving of certain point values. All the behaviors you reward should be well worth the reward value.
- Consider Changing Your Billing Model
Issuance billing may be a good alternative: it’s when you pay for reward points as you issue them, not as participants spend them. You might also consider an upfront billing model, in which you pay for reward points before they’re issued. This is much simpler to account for and manage in your budget, but also requires you to put a little more energy into your rewards program marketing to make sure points are spent.
- Be Sure You’re Tracking Your ROI Correctly
Your rewards program online platform should come with data management software. Keep a close eye on this to be sure of your program’s health and to make accurate budget predictions. Also, keep in mind that redemption rates spike at certain times, like during the holiday season.
If you’ve overshot the mark in your point distribution plan and feel like you’re suddenly pouring too much money into reward redemption, check out the slideshare below for more helpful rewards program management tips.