Reward programmes: More turnover for your company

What are reward programmes?

Reward programmes are reward systems used by companies to reward customers or employees for their loyalty. Basically, these incentive systems can be divided into two different categories: Points and status level schemes.

Status levels are reward programmes in which customers are divided into different levels depending on their purchasing behaviour or loyalty. The higher the level, the more benefits and rewards are available to the customer.

Points systems are rewards programmes in which customers collect points for every purchase or activity they carry out. These points can then be redeemed for rewards. For example, for free products or services, discounts and upgrades.

What are the advantages of rewards programmes?

Rewards programmes offer companies a wide range of benefits that go beyond simply increasing sales. Other positive effects include

• Customer loyalty
• Customer feedback for product improvement
• Personalised offers
• Data collection
• Customer motivation
• Competitive advantage
• Increased cross-selling activities

Reward programmes influence consumer behaviour

Reward programmes influence consumer behaviour through a combination of psychological and practical incentives. By offering rewards for certain actions, customers are motivated to buy more often from a particular company.

Psychologically, rewards programmes can influence customer behaviour by conveying a sense of importance and appreciation. When customers are rewarded by earning points or redeeming vouchers, they feel valued by the company. This can lead to customers developing greater brand loyalty.

In addition, earning points or redeeming vouchers can provide a sense of control and achievement. Customers feel motivated to change their behaviour in order to collect more points or receive better rewards. Customers buy more from a particular company to increase their chances of better rewards.

Another psychological phenomenon that plays a role in rewards programmes is the ‘Fear of Missing Out’ (FOMO). This phenomenon describes the need not to miss out on something. In relation to rewards programmes, this effect can lead to customers developing a strong desire to receive exclusive offers or rewards.

FOMO can be reinforced by skilful communication by companies, for example by making special offers available for a limited period only. These strategies can motivate customers to act faster and participate in the rewards programme.

What rewards are there?

There are many different types of rewards that can be offered by companies in rewards programmes. Some examples are:

• In-kind rewards: Companies can use their own products, such as promotional items or merchandise, for the rewards programme
• Products or services: These can be free or discounted products or services offered by the company.
• Discounts or vouchers: This includes a percentage discount on future purchases or vouchers for certain products or services.
• Upgrades: For example, this could be an upgrade to a higher class on an airline, an upgrade to a larger room in a hotel or an upgrade to a higher membership at a gym.
• Exclusive offers or events: Companies can provide exclusive events or special offers for events.
• Cashback or cash rewards: This can be money back on future purchases or cash rewards transferred to a bank account.

Conclusion

Rewards programmes are a great way for businesses to increase sales and reward customers. By creating an incentive, companies can influence the consumer behaviour of their customers. Companies convert customers into loyal regular customers and receive higher sales through recurring purchases.