For some folks, a gun seems like a good gift in exchange for opening a bank account. This happens in the controversial movie Bowling for Columbine, in which Michael Moore receives a hunting rifle for opening a new account.
While some reviewers and viewers were uncomfortable with the gift — and Moore joked that it was a bad idea to hand out guns at a bank — the real business lesson here is that Michigan bankers knew how to market to their clientele. The bankers sought to build and maintain relationships with customers by providing them with “instant interest” items — items that are paid for with the interest from the bank account, like hunting rifles.
Personalized rewards in the business world are a common form of relationship-based extra (RBE). Some marketers call these rewards swag or perks while others call them premiums, but in the end, they’re something extra given to a client. An RBE might be given to encourage a new relationship or used to reward an existing relationship.
Some businesses make rewards into a points game, like certain airlines that do it poorly with ever-changing point schemes and shrinking benefits that are difficult to redeem. Then there are those companies that do points right, like Starbucks giving free food and drinks for purchases and a bonus birthday gift every year. However, the best organizations make the reward personal to the client.
Personalization is the key to relationship-based extras.
RBEs are based on the idea of reciprocity — that you have to give something to get something. According to the godfather of persuasion, social psychologist Robert Cialdini, reciprocity is one of the strongest principles of persuasion (full disclosure: our company represents Dr. Cialdini). The reciprocity principle is built into the foundation of every society and relationship: You feel obligated to return the favor to someone who gives you something.
Reciprocity is even more effective when the item is personalized. In Cialdini’s book Pre-Suasion, he cites several research studies that show that gift customization is key. In one study of a fast food restaurant by Friedman and Rahman, when customers were given a keychain upon entering the restaurant they spent 12% more. However, if a customer received an equally priced food gift instead (in this case, a cup of yogurt), they spent 24% more.
The moral of the story: The right gift increased sales by 24%.
RBEs help maintain your business relationships.
Aside from increased sales, RBEs are important to show appreciation for existing relationships. All salespeople know that it is far easier to maintain an existing relationship than it is to start a new one.
Clients have become more immune to traditional advertising and marketing strategies. New customers conduct more independent research on your organization and products than ever before. It is estimated that it can take as many as seven to thirteen touches or as few as six to eight to generate a sales-ready lead. But with existing clients, it takes far less effort to maintain a relationship by showing your appreciation.
Recent article published in Forbes: https://www.forbes.com/sites/forbescommunicationscouncil/2018/01/03/the-secret-to-growing-your-business-is-giving-appreciation/#7a92b9a76765