The Dirty Secret About Breakage and Why It's Bad for Business
companies may see unused points as financial gain (and a way to fund the program), it typically means the program is failing to engage participants or achieve its goals.Luxe's Focus: Measurable Engagement
Why Open-Ended Programs Are Better
Jacque Busby founded Luxe Incentives in 1983 to help leading manufacturers and wholesalers engage their sales teams and channel partners through incentive travel. While designing one-of-a kind memorable experiences remains a core passion, she stresses that effective program design is equally important. "Unfortunately," she notes, "clients who believe in their loyalty, channel partner, incentive, and employee engagement programs often proceed with little serious measurement—until new management steps in, and by then, it’s often too late."
Luxe Focus: Measurable Engagement
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Luxe, traditionally focused on group incentive travel, collaborating with other technology firms for event registration and engagement tech. For its new proprietary ROI-focused service, Luxe has partnered with Giift, a global performance solution provider based in Singapore, to manage rewards for loyalty, incentive, and recognition programs. Giift’s platform supports gift cards, e-gifts, merchandise, and travel, along with diverse measurement processes designed to drive incremental performance. This partnership highlights Luxe's commitment to offering comprehensive, industry-specific engagement solutions, she says. Busby emphasizes, "The point of an incentive program shouldn’t be to give out rewards where a significant percentage remains unredeemed, but to generate measurable performance and support behaviors aligned with organizational goals."
The Giift AI platform allows clients to track performance across:
- Segments (tiers, stakeholder type, products, regions)
- Transactions (volume, value)
- Behaviors (referrals, cross-selling, conversions)
- Activities (acquisition, engagement, retention)
Why Open-Ended Programs Are Better
"We work with clients to design programs that promote incremental sales and other activities that correlate with measurable results," Busby says. "Clients should want all points redeemed—not only because participants earn them, but because every visit to the redemption site reinforces key program messages. Missing out on these reinforcement opportunities reduces the program’s impact."
As Luxe continues to serve its loyal incentive travel clients, Busby’s focus is on developing sales and channel engagement strategies that combine rewards with smart program design, rewarding not only results but also the actions that lead to better outcomes. See: RNN: The Lessons of Selling ROI Before Its Time.
Busby concludes, "Not only does breakage reflect poor program design, but it can also reduce transparency. Companies need to understand where unredeemed rewards are going and avoid models that rely on breakage to meet budgets. Well-designed programs ensure participants enjoy the full value of their efforts, benefiting both the company and the participants."
For More Information
Jacque BusbyChief Incentive Strategist/Founder
Luxe Incentives
414-349-3000
Jacque@luxeincentives.com
Enterprise Engagement Alliance Services
Celebrating our 15th year, the Enterprise Engagement Alliance helps organizations enhance performance through:
1. Information and marketing opportunities on stakeholder management and total rewards:
ESM Weekly on stakeholder management since 2009.
RRN Weekly on total rewards since 1996.
EEA YouTube channel on enterprise engagement, human capital, and total rewards since 2020.
2. Learning: Purpose Leadership and Stakeholder Management Academy to enhance future equity value for your
organization.3. Books on implementation: Enterprise Engagement for CEOs and Enterprise Engagement: The Roadmap.
4. Advisory services and research: Strategic guidance, learning and certification on stakeholder management, measurement, metrics, and corporate sustainability reporting.
5. Permission-based targeted business development to identify and build relationships with the people most likely to buy.
Contact: Bruce Bolger at TheICEE.org; 914-591-7600, ext. 230.
