Facebook has recently launched a service called Deals, which allows users to get special offers at retail destinations when they ‘check-in’ to that location with their Facebook account.

“When you’re looking at the Nearby Places list on your mobile phone, certain places will display a yellow ticket next to their name. Clicking through will show you the details of the offer, and then checking in will display a voucher that you can show to the person on the till to validate it. Types of deal include charity giveaways, freebie giveaways, loyalty card-like counters and deals that require you to check in multiple people at the same time.”

Deals is like a combination of FourSquare, with its social currency of ‘check-ins’ and discount voucher sites like Groupon, and represent the new face of customer loyalty. Beyond simple loyalty cards and rubber stamps, the emphasis is on broadcasting your customer loyalty to your ‘friends’, and is most apt for restaurants and coffee shops.

But perhaps more than genuine customer loyalty, Deals could simply encourage a kind of consumer nomadism, a rootless shifting customer base that constantly moves to where the best offer is. It smacks of presenteeism rather than engagement, a flash mob of punters showing up expecting a discount rather than genuine loyalty between a retailer and its customers.

As some retailers who have used Groupon have discovered, suddenly having a herd of new, temporary customers is a Faustian bargain that doesn’t necessarily translate into long-term, full-paying customers, and whose main winner is Groupon itself. And there’s always the chance that genuinely loyal customers may get shoved to the side by the stampede of coupon waving bargain hunters.

Discounting is always a risky proposition – especially with emerging ecosystems such as Groupon, where a misjudgement can lead to big losses for a business – and can rapidly become a race to the bottom. At IncentiveDirect, we believe incentives that reward sales generation are a low risk way of driving sales and growing business in a manageable, sustainable way.

Watch this amazing animation from RSA illustrating a talk by Dan Pink, a theme also covered in his book Drive.

Pink’s hypothesis is that the path to true motivation comes from within, and the desire of a person to achieve autonomy, mastery and purpose, without which man feels incomplete.

For individual inner peace, that’s a great credo, but for businesses, how can they help foster the behaviours they want to see from their workforce. How for example can a company encourage its staff to be more environmentally friendly at work? This requires instilling a collective sense of purpose and responsibility, a shared vision, and individual autonomy, mastery and purpose has very little to do with it. Incentives are great for those little nudges in the right direction that can result in a major shift in corporate behaviour.

An interesting concept from Gwilym Davies – “World Barista Champion” – is the dis-loyalty card. Designed to encourage diversity, rather than conformity, it offers a refreshing twist on the tired loyalty cards of most coffee chains. Rather than slavishly visiting the same old coffee shop in order to earn a free coffee, the dis-loyalty card encourages the shopper to frequent a number of otherwise unaffiliated establishments.

Joined-up thinking like this by small businesses and local communities is the answer to the bland homogenisation of our high streets by large retail chains. The large retailers know that loyalty cards are the way to embed habits and repeated behaviours, but the same logic can also be extended to less commercially driven enterprises. See also The Crouch End Project for how local retailers can use the power of customer loyalty to support local businesses.

In business, decisions are often made by the person who takes home the biggest paycheck. This is known as the HiPPO problem (Highest Paid Person’s Opinion). As this article states:

“HIPPO is the high level manager who comes to your project at the last moment and offers an opinion on what to include to make the project a success. And you must consider it, even if the idea is out of scope, past deadline or [...] crazy”

People who throw their weight around without regard for the considered opinions of those below them on the org chart, create toxic workplaces. Eventually, people will start deferring more and more decisions to the HiPPO, rather than seeking creative solutions for themselves that may get overruled on a whim. And of course, it continues to feed to ego of HiPPOs to think they are geniuses (otherwise why else would they be paid so much?) who can turn their instinctive insight onto whatever they rest their eyeballs on.

All of this leads to a culture of complacency for most and the feeding of rampant egos for few. This state of affairs may be hidden or ignored when times are good – as Pixar founder Ed Catmull says, “success hides problems” – but does not bode well for long term success. Motivation systems that continually reward the same behaviours, or only reward the superstars, fuel complacency and egotism, reinforcing the toxic workpace.

At the Harvard Business Review, Peter Sims thinks that Google, who he thinks are at a ‘pivotal moment in its history’ could learn from Pixar, where processes are in place to ensure that success doesn’t breed complacency.

“what Pixar has that Google does not is a culture where the fear of complacency is a strong motivator, where new problems are identified, discussed, and addressed openly and honestly, all of which requires humility”

Humility of top executives, and active steps to prevent complacency, resting on laurels, are key tenets of the Pixar approach, and ones that all companies should embrace. Motivation programs can be used to help stir up new ways of working, and help ensure that the best ideas win, regardless of where they came from.

Or as that old warhorse Winston Churchill once said: “Success is not final, failure is not fatal: it is the courage to continue that counts”

The recession has changed the marketplace forever. The New Consumer will change the way that business and consumers think and behave. From now on, there is a permanent shift in the consumer mindset, and this will translate into the way that businesses operate in order to survive and prosper.

So what does the New Consumer look like

• The New Consumer is more careful about what they buy.
• The New Consumer want to feel connected to the things they own.
• The New Consumer is looking for long term value rather than short term cost saving.
• The New Consumer will only buy once they are convinced it is the right product for them.
• The New Consumer values their time more than ever.

The continued growth of companies like Apple is an object lesson that people are willing to spend, and often pay more, for items that they believe will last longer, serve them better, and save them time. Consumers are growing tired of cheap, poorly made stuff that doesn’t last, clutters up their houses, and makes them feel guilty when they have to throw it out. The new consumer wants to own fewer but better things that have a deeper resonance with them.

A report by Price Waterhouse Coopers states that this mindset is likely to remain even after the recession has ended.

“Companies need to recognize that there will not be a wholesale return to a pre-recession shopping mode and will need to adapt to the changed behaviors and patterns to win in today’s changed marketplace”

This should represent a seismic shift in how businesses sell to their customers. Customer service is becoming ever more important, in helping consumers find the product which is right for them, rather than trying for the quick sale.

This is not just about the High Street, but online retailing too. A recent report by Fast Company shows that bad customer experience when buying online leads to not only a negative impression which is unlikely to lead to repeat custom, but that ‘cart abandonment’, the termination of the sales transaction, could be costing US businesses up to $44 billion a year.

This also needs to filter through to incentive programs. Incentives should focus not just on rewarding the sales team for making the sale, but rewarding everyone involved in making the customer feel like a king. Smarter sales incentives look at the bigger picture and focus on building longer term relationships with customers. Most customer loyalty programs, rubber stamping a card for a chance of a free coffee or a discount, are lazy choices. They are no match for a structured internal incentive solution that empowers employees to offer killer customer service, by:

• rewarding them to improve their knowledge so they can offer better advice
• rewarding them to improve their skills so that they are better employees
• rewarding them for going the extra mile
• making the right sale to the customer
• recognising the lifetime value of a customer

For an inspirational video on how far customer service can take you, check out this video, Creating Lifetime Customers, from Chris Zane of Zanes Cycles. It’s over an hour long but it’s well worth it, and at the end of it you may feel like you want to open a bicycle shop.

What’s also fascinating about Zane’s presentation is that Zanes isn’t just about B2C retail, as they also fulfil bikes for a number of incentive programs for clients including American Express and Tropicana. The same lessons apply to the incentives market. As a provider of incentive services and product fulfilment, we are representing our clients to their customers, and sitting in the middle. To be successful, we need to provide great service both ways.