A Closer Look at Discount Programs and Engagement (New eBook)

By Brandon Carter | Updated on Mar 28, 2017 8:43:00 AM

mobilecoupons.pngFor seven years we've published articles and tips on engagement and loyalty. We've developed a great readership and have had the good fortune of starting some great dialog over the years.
 
But many of you have asked the question of what exactly it is that Access Development does.
 
You'd think loyalty and reward programs. Maybe engagement software (Access Development does sound like a software name).
 
While those things are part of what we do, our core product is something different entirely.
 
Discount programs. That's our thing.
 
We've built a 30-year old business around using discounts to help our clients get what they want. And what they want has cut across a lot of different lines…
 
Those are the executions, but what each of our clients wants is engagement, loyalty, and new customer acquisition.
 
Today we launched a new eBook that covers everything you'd ever want to know about discount programs. How they're used, which companies and industries use them and how, how to build your own, how to evaluate performance, and so on. Click the banner below to download it.
discount programs ebook
We're going to publish a few articles about discount programs here as well. We'll show you that discount programs are as vital an engagement tool as anything else you can invest in.
 
Here’s the overarching question we want you to keep in mind: are there big problems you can help your customers solve?
 
Not only problems your core product or service solves, but related issues.
 
And would helping solve that problem endear your business to customers?
 
This is where we've settled in on discount programs. Let me explain a bit about how they work.
 

What is a Discount Program?

The most basic definition of a discount program is a variety of merchant offers and discounts collected for individual use. Companies like Access contract directly with restaurants and retailers, who seek new customers.
 
creditcards.pngSo from a single web portal or mobile app you can find discounts at all sorts of businesses.
 
Chances are you’ve come into contact with one before. Discount programs are popular for youth fundraisers and association member benefits. Maybe your credit card sent a deal with your most recent statement. A deal that was likely sourced from a discount network instead of directly with a merchant.
 
As we outline in the eBook, not all discount programs are the same.
 
Some, like ours, are private and for our clients to serve out as they see fit. Others are public-facing and can be purchased in the grocery store checkout line.
 
Some are free, some are cheap, and some charge per member, per month.
 
These are important differences with major implications all around. Check out the eBook for why.

How do Discount Programs Contribute to Engagement and Loyalty?

"How would coupons from a restaurant down the road help me build better relationships with my customers?"
 
It's a fair question. To answer it, we’ll revert back to our top takeaway: what other problems can you solve for your customers?
 
Discount programs help people keep more of their money. As much as 96% of the population uses coupons. Usage is particularly high in the affluent and Millennial demographics.

empty_restaurant.jpgBehind the scenes, Americans
have seen their take home pay decline thanks to stagnant wages, rising healthcare costs, and inflation. Coupons aren't a "nice to have," but a "must have" for most people.
 
A good discount program will help them save on everyday purchases. By everyday, we mean in-store transactions just a few minutes away from home, where the vast majority of people do their spending.
 
"Okay, people like deals. But what does that have to do with my brand?"
 
From the business side, discount programs help with a few critical tasks.
 
First, they allow the brand to give money back to customers without having to discount your own services (or in the case of employers, raise wages).
 
Plus, how often do brands get to put money back in people’s pockets, instead of asking for more?
 
Example: At some point, a brand offering a discount program can save a customer $300. That's an amount that wipes out dues and fees for many organizations.
 
Second, they create regular, if not daily, positive brand interactions. It’s a crowded, busy world, with high competition for short attention spans. A discount program with your brand on it offers regular engagement.
 
So every Friday night when your customer is arguing with her husband about where to go eat, she can pop open your brand's mobile coupon app and find something they can agree on. Oh, and they’ll save $10 on that meal.
 
That positive engagement matters when it comes time for her to make a decision to continue being your customer.
 
Some organizations even go beyond that. They leverage their discount program to gain more interest in other aspects of their brand.
 
Example: One of Access’ clients has seen a 30% increase in visits to their primary website, plus hundreds of new member profiles created. All because their members jumped over to their site from the discount program site.
 
(For other ways companies use discount programs to their advantage, click the banner below.)
customer engagement case studies
There’s more we could discuss here, such as the advantages of aligning your brand with massive retail brands, using discounts programs as an acquisition incentive, or creating a premium membership club built around exclusive offers. Learn more about those in our discount program eBook.
 

What Types of Companies Offer Discount Programs?

Really, any company can offer some version of a discount program. These programs have a sweet spot in organizations with recurring payments, however. Think membership organizations, subscription services, insurance companies, even banks.
 
Basically, if you’re sending out a regular statement or bill, then a discount program can do wonders for you.
 
One of our clients, a credit card company, sends out occasional offers to cardholders through direct mail and email. There’s no fine print in the offers that says payment must be made with their card. But people use it anyway, boosting cardholder spend and average transaction size.
 
Many Access clients, including several national retailers, use a discount program as the backbone of their membership clubs. These clubs include discounts on their own products, but also restaurant and dining deals. It’s an easy way to earn additional revenue from engaged customers while also increasing the value of the relationship.
 
tmobiletuesdays.pngIn a similar vein, merchant discounts serve as benefits for many loyalty programs. A popular example of this is the battle between T-Mobile Tuesdays (25% off pizza, $5 credits for streaming movies for example), Verizon Smart Rewards (points that can be redeemed for local offers) and AT&T’s participation in the Plenti coalition loyalty program. Each of these is rewarding customers with discounts to other merchants they know their customers are interested in.
 
Employee discount programs are a rapidly growing segment as well. People are taking home less money, but increasing compensation isn’t always an option. It makes a difference when employees can get 30% off at the coffee shop across from the office, for example.
 
There’s more.
 
Some banks use deals to incentivize new customers to open checking accounts or use the bank’s branded debit or credit cards. Some athletic apparel stores offer gym membership discounts to get people to sign up for their mailing lists. Travel booking sites and airlines upsell customers on savings packages with local accommodations and attractions at specific destination cities.
 
The point is savings inspires people to act. We’re chemically wired to respond to a good deal.
 
Regardless of your industry or vertical, the only limitation on what you can do with deals is your own creativity.
 
The best news is the cost is minimal to you, as a business - something we discuss in the eBook.
 

Solutions to Problems

Let's go back to where we started in this article. Discount programs enable brands to offer a solution to a problem: saving money on regular purchases.
 
It’s tangential to what most of our clients do. They’re membership groups, insurance companies, financial institutions, and employers, among others. They've learned that helping people stretch their paychecks makes them more likely to stick around.
 
They’re offering a solution to a near-universal problem.
 
It adds value to the relationship. And as one of our clients always preaches, price is only an issue in the absence of value.
 
Discount programs are our thing. What will yours be?
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Topics: Discount Programs

Written by: Brandon Carter

Brandon is a writer and marketer for Access Development. He's a frequent blogger on customer and employee engagement & loyalty, consumer trends, and branding.

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