Tony O'Connor, Loyalty Expert
Tony O'Connor Loyalty Expert
6 minute Read • 20 May 2021

How smart rewards create more loyalty

Rewarding your customers is a vital part of building loyalty - and by offering rewards your customers really want, you can quickly build a stronger relationship.

If you’ve spent any time around dogs, you probably have some idea how they’re trained. On a very basic level, the trainer commands the dog to do something, and when the dog does it correctly, the dog is given a reward.

This form of training is called conditioning - and if you think that next I’m about to say that businesses and customers have a similar relationship... you couldn’t possibly be more wrong. 

Customers are people - with opinions, options, free will, and a smartphone that will bring up all of your competition in a 10-second search.

You can’t just offer them rewards and expect them to mindlessly buy your products, but you can encourage them to make emotional and rational connections with your company, which can transform them into return customers.

Here’s everything you need to know about setting the right rewards for your loyalty program…

 

Discounts might not be as effective as you think

Chances are, if you were to ask 100 customers of any given business ‘would you like a discount’? Then at least 99 of them would respond YES. People like discounts - but they might not be so good for your business.

For starters, discounts aren’t memorable. As opposed to giving away a tangible item for free, which will have a much greater long-term impact on your customer. 

When setting rewards, it can be a good idea to include a couple of discounts, especially aimed for new customers, so they can get something from the loyalty program quickly and easily. However, make sure that you also include some products and accessories that customers can get 100% for free. You’ll find your best customers have no problem waiting a little bit longer for a better reward.

 

Everyone loves gifts

Gifts from your existing stock make excellent rewards. Not only does your standard mark-up inflate the perceived value - but people love gifts. Even more than discounts.

In some circumstances, gifts can also become vehicles for word-of-mouth advertising. Let say, as an example, that a customer for a leather-goods shop collects enough points to earn a leather hat as a reward.

Not only is that customer likely to wear their free leather hat with pride - but they’ll also have a story to tell people who ask about it. They didn’t simply buy it - they earned it by collecting points at your store, and it was completely free. This makes the leather-goods shop part a very positive part of the story.

 

Exclusive rewards make people feel special

Another tactic when it comes to setting rewards is to offer items that money can’t buy. This can often work really well if there’s a special-edition version of a popular item. Examples could include a signed copy of a book, or a special reserve bottle of wine.

The goal here is to encourage your customers to make purchases and collect points - but also for them to feel a sense of accomplishment, by earning a reward that other people can’t get.

It’s a very powerful way to help strengthen the emotional connection between your store and your customers.

 

 

Offer experiences as rewards - but make them for groups, where possible

Another form of reward is to offer customers the chance to experience something special. Common examples are wine-tasting events with local experts, or perhaps a book-reading by a local author.

Obviously the experience needs to be relevant to your business - but the trick is to offer the experience for 4-8 people as a group. Not only does this make your loyal customer feel special, as they get to invite friends and family to take part - but it also introduces your business to the friends and family.

In that way, experience-based rewards can actually become customer acquisition opportunities - with the chance to also sign-up these new potential customers to your loyalty program.

 

Use rewards to introduce customers to new products or flavours.

Another way to utilise your rewards program, is to use it to give customers the chance to try items or products that they usually wouldn’t.

If, for example, you were running a muffin shop, and you had recently added a new sour-cherry muffin to your menu, but people didn;t seem interested, give it a second chance by making it a reward people can exchange their points for. Ideally, requiring a lower number of points than other, similar items.

By making it seem to be excellent value on the rewards list, you are encouraging your ebay customers to trial it - and if they like it, you might see regular purchases increase too.

This is also an excellent tactic for moving stock quickly, before it expires, or the new season arrives. It rewards your best, most loyal customers - and makes your loyalty program seem even better value.

 

Get a little bit creative

An alternative way of looking at your rewards program, is to have a little bit of fun with it. One of our clients at Piggy offers a round-the-world-trip to customers who spend a million Euros with them. Obviously this is a reward that is never going to be redeemed, but by simply adding it to the rewards list, it gives customers a smile and becomes a talking point.

Of course, offering fun rewards is only possible when you have a loyalty program that gives you the control and system management tools to change your rewards at will.

 

Reward your business with a rewards program

Offering your customers rewards is always a good idea, and an excellent way to build stronger relationships.

There are many options available, but you should definitely consider joining an existing loyalty platform. Loyalty platforms offer flexible rewards, and other bonuses, as well as an existing customer base to help with participation - all set-up and ready to go for a low monthly cost.

You can probably find a few different options by searching online, but if you'd rather speak to a real person, click here to make an appointment with one of our loyalty experts. 

7 minute Read
Tony O'Connor, Loyalty Expert
Tony O'Connor Loyalty Expert
11 minute Read
Tony O'Connor, Loyalty Expert
Tony O'Connor Loyalty Expert
10 minute Read
Dagmar Sanderink, Designer
Dagmar Sanderink Designer

Start your own loyalty program in just 5 minutes