3 Elements of an Effective Customer Rewards Program

3 Elements of an Effective Customer Rewards Program

customer service programMoney can buy many things, but it cannot buy one of the most important elements of business success: relationships. Building customer relationships is all about finding people who believe your offers and making them come back for more. This is often done through customer incentive programs.

These well-meaning programs, however, are not always effective in influencing consumer behaviour and encouraging loyalty. Your customer rewards program must be a step ahead of the competition for it to work for your organisation.

Nailing Down Your Goals

Be clear about the goals you want to achieve and how a rewards program will help.

Suppose you manage a restaurant; customers may expect an occasional free offer or a discount from affiliate companies. If you manage an interior design shop, however, your rewards program might prosper more if it is geared toward encouraging referrals rather than repeat business.

Influencing buyer behaviour, encouraging loyalty, and increasing sales will be easy if you know the goals of the business and the customers.

Breaking Through the Clutter

The key to an effective rewards program is giving customers a measurable reward that creates real incentive, one that your competitors cannot match. Your loyalty program should cut through the noise and clutter.

You need to know and understand what consumers perceive to be of worth, and sometimes, this does not have anything to with money.

Reward systems provider GroupTrader explains that an effective incentive program for SMEs should give customers access to exclusive offers, such as deals usually reserved for large companies. The point is to offer something worthwhile that consumers will actually use or enjoy.

Rewarding Continued Loyalty

A freebie every now and then is good, but it can wear thin, especially if a competitor down the street offers the same thing. Keep your customers coming back by rewarding their continued loyalty with unexpected deals and discounts.

A tiered rewards program is a way to continually engage and give back to consumers. More than rewards and engagement, you should also focus on practicality to retain customers. You keep offering free coffee at your restaurant, but if diners have no interest in that offer, they will not stick around.

To be truly effective, any rewards program for your business must truly be about the customers — giving them what they want and something they need without having to ask for it.


3 thoughts on “3 Elements of an Effective Customer Rewards Program

  1. That’s true. I keep coming back to our local supermarket because they have regular discounts and free items for shoppers. A 50% price slash on my favourite cereals and oats might not be worth much to many, but to me, it’s actually a great deal.

    1. Small things really do count. What good is it to have a 75% off on foot cream if you rarely buy or use one? Practicality should always be one of the considerations for rewards programs.

  2. A deal cannot be great if it just offers a price slash. It has to be something worthwhile. If I’m at a dress shop, for instance, I’d want free alteration services or free style consultation, rather than a free bouquet or corsage.

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