Customer Rewards Programs: are they right for your business?

Rewards Highway  Sign

If you’re considering launching a customer rewards program, remember, you can’t “buy” loyalty.  No rewards program can compensate for shortcomings in the fundamentals: service, quality, reliability and value.

It can, however, build on satisfaction you’ve already earned. It’s a way to deepen your relationship with customers so you can provide even more value and through that earn more business as well as excellent word of mouth. The internet and mobile technology have enabled ongoing customer engagement, so you can (and should) be a greater part of their daily lives.

Rewards programs focus on encouraging behaviors that make sense for your business,  such as doing business more frequently or in greater volume; reaching certain spending levels; making  purchases online; referring other customers; or simply signing up to receive email notifications.

To maximize the returns from implementing a rewards-type program, avoid rushing in. Even if you are considering something as seemingly simple as a punch card (e.g., buy 10 get the next for free), you have some analysis and planning to do.

The article “Raising the Bar of Customer Loyalty Programs”  by Maritz Loyalty Marketing provides a good overview.

In a nutshell:

  • Identify the customer behavior(s) you should be rewarding.
  • Determine what type(s) of reward(s) would be most valued by your customers.
  • Consider different program designs; whatever you select, it should be financially viable, straight-forward to communicate, easy to understand and use, and meaningful for your target customers. That value could be monetary (discounts, freebies) or something less tangible like charitable contributions to a cause that’s dear to them.
  • Ensure that the program is communicated sufficiently and regularly to customers-through your website, emails, social media sites, employees, and onsite if you’re bricks-and-mortar.  Out of sight, out of mind!

Not every business may need or be appropriate for a “rewards” type program. But every business can certainly benefit from nurturing the customer relationship.

Suggested reading:

Customer Loyalty Programs: A Must-Have Retention Strategy – Nicole Fallon, Business News Daily

What Matters Most in Small Business Loyalty Program Success –  Mike Schultz, Digital Spark Marketing

7 Customer Loyalty Programs That Actually Add Value – Kendall Peiguss, Hubspot

How to Turn New Customers Into Repeat Customers (Secrets of Sticky Loyalty Programs) – Gregory Ciotti, Help Scout

Gamification & Customer Loyalty: The Good, The Bad, and The Ugly – Gregory Ciotti, Help Scout

 

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