It’s a bit like getting paid at the end of the month
Finally. After accumulating hours of work, day after day, one can claim one’s pay. It takes some time, but in the end, efforts are rewarded for monetary value. Similarly, reward programs push consumers to spend with them, and accumulate tokens towards a reward. Just as a salary motivates one to show up at work every day, rewards are meant to direct customers’ preferences so they keep on choosing a certain brand.
What is a Rewards Program?
It is five times more expensive to acquire a new customer than to keep an existing one. For this reason, brands are always looking for ways to create a loyal consumer base. One of the best strategies is using a reward program, which offers prizes for a customer’s loyalty to a brand. These points can be converted to cashback, Bits of Stock™, discounts, freebies, or special customer treatment. It is common practice to use a point system for this purpose: the more points one earns, the more rewards can be attained. The way these points are collected also ranges: from old-style stickers collection, to the very common “loyalty cards”, which act as points credit cards towards a certain brand, and electronic apps which automatically calculate rewards. Another common reward system is the tiered program, which is based on the incremental increase of rewards with every purchase. These are usually used by hotels, airlines, and other higher-price point businesses. Reward programs differ, but the purpose remains the same: you get rewards by purchasing from the brands you love.
Rewards build trust, one purchase at a time
In addition to having more consumers spend on their products, offering a rewards program allows a brand to build trust. When one’s favorite cafe offers the 10th cup of coffee for free, the reward acts as a motivator, but also as a way for the cafe to show it appreciates its customers. Consumers that feel appreciated are more likely to refer a friend to a brand, and since word of mouth is the best type of advertising, this becomes a valuable asset. On top of this, reward programs can also function as a way for brands to personalize a user’s experience. By tracking purchases and preferences, a brand can make sure that its consumers receive tailored recommendations and prizes. And who doesn’t want that?
Why should you care about Reward Programs:
Reward programs are a way to get more involved with the brands you already use. Programs like this can also allow consumers to feel closer to a brand and thus become more active customers, willing to share their experiences and expectations with both the brand and their social circle.
Why will your future-self thank you?
Living in a world of instant gratification, some things are worth waiting for. Joining a rewards program is the ultimate win-win situation: you get rewarded for simply buying from the brands you already love, while brands gain a loyal consumer. But by getting short-term rewards such as cashback or discounts, rewards just become another reason to spend. Instead, by using Bits of Stock™ as a reward program, one can invest in the future without changing one’s habits.
- American Airlines was the first to launch a modern marketing rewards program in 1981: the AAdvantage frequent flyer program.
- 69% of consumers say reward programs influence their decision to choose a brand.
- The weirdest reward we have found is the one given by Etihad airlines: with “only” 6,700 miles you get to name your own star.