How To Reward Customers Unfairly (And Get Away with It)

It is natural to worry about being fair.  When you have current customers and are trying to create promotions to lure in new customers, the last thing you want is for those people or organizations that you already work with or other groups of potential new customers to feel unappreciated or marginalized.  At the same time, you want to be able to offer the best incentives at any particular time that work for your business and not have to limit yourself.  So how can you get around this problem and choose to be a bit unfair ... but still get away with it?

There are three basic models for unfairly rewarding customers that are being increasingly used by small business owners to face this challenge.  Here is a description of all three and how you might use each one to promote your small business.   

Tactic #1: The First Mover Reward

With this tactic you are setting up a promotion that will reward those who act quickly to get a specific type of service.  While existing customers might be able to take advantage of this, you can increase your chances of reaching primarily newer customers by choosing specifically where you will offer this type of promotion. If your business is focused on helping people to organize their garages and outdoor living, for example, you might consider offering a promotion specifically at an event like a Home & Garden show that mostly newer consumers who you have not worked with before would be likely to attend.  Then you can reward those who do sign up from that event and maintain your regular prices for the rest of your customers.

Tactic #2: The Random Reward

This tactic is self explanatory, but has the added power of engaging customers and potential customers with an uncertain outcome. Everyone loves to win something, but regardless of who wins the reward, you still have a chance to engage each participant with the opportunity to win. This could be something as simple as discounts for products, or more complex like a competition online to be randomly rewarded with some type of prize.

Tactic #3 - The Merit-Based Reward

More and more co-creation style competitions are being launched online where people need to share their best ideas in order to win some type of support or recognition. Doritos let consumers create Super Bowl ads to run on air, but unless you've got a few million dollars lying around you probably won't be recreating that effort.  You might, though, be able to engage your customers and potential customers in an effort to share their best ideas on a specific topic that has some relation to your small business.  That could mean creating a question on Quora.com and asking consumers to answer it. Or creating a series of polls that customers need to answer in order to "earn" some type of discount or special offer. Once you have set some rules in place for getting this special offer through actions, you can follow through and only reward those who are the most engaged.

This post is republished from the original article I wrote for the American Express Open Forum website. It is part of "Small Business Friday" on this blog (though sometimes I'm a day late!) - a featured series on ideas and marketing techniques for small businesses.

To read more articles like this, visit the "Small Business Friday" category on this blog.