Marketing incentives are an excellent way for businesses to market, beef up lead generation, reward customers and build up their loyalty program. However, if these incentives never get used, it is a sign that the certificates or vouchers are not working correctly. High breakage rates, i.e. the percentage of rewards that are not getting spent, illustrate the fact that consumers are not making use of your program, and therefore have few opportunities to remember your brand and continue business with you down the road.

A breakage model is based on the idea that giving something away for free but making it difficult for the consumer to redeem will save you money in the long run. For example, in the case of a travel certificate, a breakage model often requires consumers to pay a deposit without being able to gather information about the trip, or makes the certificate redemption and the reservation process so cumbersome that consumers will give up.

Every time consumers earn rewards but do not spend them, it decreases the value of those rewards. If your rewards start losing value in the consumer’s mind, consumers will be less motivated to find ways to earn more rewards. Following a breakage model will only make your loyalty program counter-productive. If you are using travel certificates to encourage a customer to tour (as in a timeshare or vacation club model) or to take a test drive (at a car dealership) or as a gift in the sales process, you want to ensure that the certificate itself is streamlined and convenient to use, offering a valued experience to your customer.

At True Incentive, we base our business model on the opposite simple philosophy. The travel certificates we issue are meant to be used and we make it as easy and convenient as possible for consumers to redeem. Our new platform makes redeeming travel incentives comparable to the experience found on other travel sites. The redemption process is transparent, ensuring that most certificates will be put to good use.

When consumers are encouraged to use their travel certificates, they will be more engaged in the process. In return, you will be able to build your credibility and increase the percentage of return customers in the future.