Rewarding Loyalty – The Incentives Have Changed but the Idea Remains the Same

Helping my co-workers prepare for our November 15^th Webinar, “Rewarding Customer Loyalty One Unforgettable Experience at a Time” took me back to my years working in the incentive marketing business for John E. Connelly, who was a groundbreaker in the incentive field back in 1958 and who continued as an industry leader for the next 50 years. In fact, he was called “the father of make-a-deposit, get-a-toaster bank marketing,” by Fortune magazine.

Mr. C. (as he preferred to be called) earned his first million dollars by encouraging bank marketing executives to cement customer loyalty with collect-a-set dinnerware for passbook savings deposits. Back then, it was a novel idea that really caught on and paved the way for the current loyalty and incentive industry. Today, Colloquy estimates it to be a $48 billion industry across the financial, travel /hospitality and retail sectors of the U.S. economy.

Mr. C. continued to sell successful incentive programs to financial institutions across the country because he really understood people and what makes them tick. His knowledge of psychology didn’t come from a college but simply from living and common sense. For example, when he sold the idea of collect-a-set dinnerware for savings account deposits in the 50s, he knew that housewives were often the ones making small deposits in local banks back then. He also knew there was little to differentiate one bank from another. Collect-a-set dishes not only gave the bank an edge over the competition but it gave the customer a reason to keep coming back and making deposits – to finish her collection!

Today, dishes and toasters (yes, he was into those as well!) as incentives are fodder for jokes, but back then, they were as unique as an experiential backstage pass to a Broadway play would be today. Even though the types of incentives that appeal to customers changed through the years, the concept of rewarding customer loyalty remains the same.

Loyalty with a Social Conscience

Mr. C. used his successful template for inventive incentive programs when he created Apples for the Students in the late 1980s. The program was sold to large grocery store chains across the country. It created a link between the local stores, community members and area schools whereby shopping at the store allowed supporters to earn points for schools to redeem for Apple computers and other educational awards. Since it was instituted, the program has resulted in tens of millions in Apple computers and other educational awards being given to schools across the country. In 1989, it received one of only 70 Presidential C-Flag awards given by then President George H. W. Bush, honoring private sector initiatives, showing that the loyalty and incentive industry can not only cement customer loyalty, it can enable companies to help the communities where they do business.

My Personal Incentive Experience

When I first met Mr. Connelly, he was one of the finalists for the local Ernst & Young Entrepreneur of the Year award in 1993. As a project for my master’s thesis, I was assigned the task of writing articles for the local business newspaper about each of them. He won the award that year and I landed a job at his company as a writer in the marketing department. I got a quick education in the incentive industry and was soon writing news releases, collateral copy for how-to guides, brochures, newsletters, sales mailers with bounce-backs and more.

But it wasn’t until I was given even more duties at the company that I truly understood the magnitude of the incentive and loyalty industry. In addition to writing, I was tasked with finding, buying and shipping the merchandise in each program. At first, to someone who loves shopping and shiny new things, it sounded like a dream but it didn’t take me long to realize how daunting it was going to be. I dealt with incentive industry manufacturer’s reps, learned who had what lines and in what areas of the country, selected items at many different price points, calculated our margins, helped negotiate deals based on anticipated volume, estimated product and pricing changes between the catalog print date and the expected fulfillment dates and much more. Yikes, I remember at first how my head was spinning and I wished it had been an MBA I’d received instead of an MA in journalism! But when you work for an entrepreneur you wear many hats even if you don’t look particularly good in some of them.

What I learned most from that time is that the incentive and loyalty industry is constantly changing and evolving. Just like toasters and collect-a-set dishes aren’t today’s premium of choice we may find next year that robotic floor cleaners have surpassed luxury travel (probably not – but you never know!).