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Want to get your customers hooked onto your brand? It’s easy –  just reward them! 

But is it really that simple to lock in customer loyalty and ensure that it lasts? And will that extra time and money spent in offering discounts and gifts truly pay off? To ease such concerns, we should learn from the best customer reward programs in the market and understand why they work so well and offer the best ROI. 

One of the main reasons why customer reward programs are something every company should look at is because it reinforces the idea of keeping current customers happy and retaining them. It not only costs a great deal more to convert a new customer but it is also 9 times more likely that an existing customer will purchase from you than a new one. So, why not gift them?

Most popular types of reward programs and why they work:

  1. Customer loyalty points
  2. Paid plans with payback
  3. Tiered campaigns 
  4. Value-based or charity plans
  5. Game-based incentives

1) Customer loyalty points programs

Most buyers are aware of point-based loyalty programs as they are popular and relatively easy to implement. They are based on the premise that the more you buy, the more you can earn. Over time, these points add up as store credit and can be redeemed for discounts or free items. 

Most companies offer a free product or a major discount on a product or service as a reward. But clever ones send gifts that are customised to the buyer’s tastes and are in line with their brand image. eg: A women’s clothing brand can reward a loyal customer with another predictable clothing item, but to really delight a customer, it can send her a designer handbag, jewellery or a make-up tutorial. This shows the customer that the company has taken the time and effort to get to know her. 

Point programs can also be used to encourage customers to act in a certain manner. If you wish to urge customers to purchase from your app, you may offer more points on products bought via the app, rather than the shop. 

You may also like: ‘What Does Customer Loyalty Mean For Your Business?’

2) Paid membership plans 

Paid reward programs invite customers to become members for a nominal fee. 

This kind of  membership opens up all kinds of privileged opportunities for a loyal customer. It’s a special program made with insight and expertise as no member should feel duped but instead feel elated to be getting more than he or she has paid for. It has to make a customer feel unique and exceptional. 

A paid system does not depend on how many products or services a customer purchases, unlike a points program. The membership fee is usually an automated amount that gets credited every quarter, 6 months or each year. Amazon’s Prime membership is a very successful example of this type of program. It enables special things such as massive discounts, freebies or 24 hour delivery for a specific lot of buyers.. 

3) Tiered or level plans

Tiered loyalty programs are similar to points programs, but they help companies to divide their customer base into different levels. This allows them to cater to the various brackets better, resulting in better CX and customer retention. 

Depending on how much a customer spends, he or she is entitled to certain discounts, early bird privileges or rights. The aspiration of the customer is to climb the tiers to gain better offers and gifts. This works for both the customer and brand in a positive way.

4) Value-based on charity programs

Companies with strong Corporate Social Responsibility programs or brands that stand for certain causes utilise this category of reward programs to strengthen their market stance. It is also a good way to make customers aware of a cause that your brand is associated with.

They operate on a system that donates a percentage of every sale to a chosen charity or cause. This is a powerful loyalty program that has multiple benefits. However, it is a program that is suited to specific brands and client base, who’s image and mindset is in line with charity and donations. 

Related: ‘How Technology Offers Customer Value’

5) Game-based incentives

It has been noted that most customer age groups like to engage in simple, online games. Some companies have taken advantage of this and launched game-based loyalty and reward programs.

The GooglePay app has a new addition called Indi-Home, an interactive home-building game that offers points every time a customer pays via the app. Like a point system, these numbers add up towards building tiny online homes and getting discounts on completion of each tiny digital home. 

This technique infuses entertainment into the loyalty program to make a deeper impact on the customer. 

Hence, the type of customer reward program you choose, depends on your brand, customer base, image and positioning. If you need help to know which loyalty program suits your customers, we can help you to conduct a survey and offer some more tips to keep your customers happy. Call us today! 

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