Why incentivising needs to leapfrog into the future?

“Buy 1 get 1 free” – is probably the most popular promotional catch-phrase of the 21st century. The truth is that since the invention of proper price discovery tools (such as ecommerce websites and price comparison sites), it has become quite hard for retailers to pull such a trick – where prices are increased, and in return they dole out freebies. Consumers are becoming increasingly aware and price sensitive, during the down economy.

The birth of “value seeking” consumers also caused concept of “brand loyalty” to be assigned to the dustbins of history. No longer is one consumer loyal to any brand for the purpose of “pride” or “quality association” – but rather, which one gives the most value and return on investment.

Membership cards, and gamifying incentives

For this very reason, retailers and brands have gone to war (at a high cost) to try and retain their most valued customers – dishing out membership cards and discounts that come with repeated purchase (or consumption). Over the past decade or so, membership cards to almost anything one can think of: malls, groceries stores, and even car wash, have become the staple for middle class of the world.

However, the effectiveness of such membership cards have started to dwindle, for lack of understanding (in part by brands and businesses) of the consumers’ need to be engaged. Smart brands, realizing this, decided to gamify their promotions. They have even created apps to make this happen. Users can earn points, store points, and spend points as they wished. Alas, retailers and brands adopted a trick or two from gaming companies.

But, is gamification alone enough to leapfrog incentivising efforts into the future? We think not, if another important component is missing – data.

Rise of big data

Bought a box of milk? The exact brand, price and date gets recorded and goes under a folder with your name on it. That’s how much the capabilities of brands and retailers have evolved. With so much data being gathered, retailers and brands are starting to use these data to understand their customer base a tad bit better.

To say that we’ve reached full potential for big data – is a slightly premature thought. To data, only a handful of big names have started to use the data gather to make predictions – such as what other products would the customer be interested in (such as Amazon), and advertising that the customer would respond to favourably (such as Facebook and Google).

Suffice to say, big data’s benefits have not yet trickled down (maybe just a trickle) to small businesses in a way that they would understand their customers better.

How can small businesses compete?

So far, we only managed to emphasize the returns that big brands and retailers have reaped from the rolling out of national membership programmes, success in gamification and big data implementations leading to better understanding of consumer needs.

However, what we’ve neglected to mention is the high cost to implement such systems. Quite often, the costs don’t quite match the returns for many years. So how do small businesses who are interested in such capabilities, even acquire it?

Fortunately, due to massive over-investment into this industry – led by extremely talented individuals (and startups), marketing have turned into a science, rather than guesswork. Platforms that are available today have also turned incentivising into a mixture of math and science, where given X investment, you get Y returns.

But still, we’re in the early days. The point is, the technology is readily available today, but still there are still hiccups that need to be ironed out – customer adoption and experience, operational friction (and costs).

For example, many applications are not designed with the user experience in mind, and when a certain user wants to claim points or rewards, there’s usually huge friction – the store doesn’t accept, having to print out physical vouchers, the app is not compatible with the store’s system, and if it involves money, there’s usually a withdrawal cost.


At Centive, we believe that gamification the “future” medium to engage customers, but data is the ultimate tool to understand their needs.

Understanding your customer does not need to be difficult, and can be frictionless – if the right technology is developed. It is like going back to the days where your local grocery store owner knows you by name, and even doesn’t mind extending you a credit to buy groceries.

Fulfilling your customers’ needs encourages trust, and trust retains your customers for life.