Everyone likes to feel like they’re being rewarded for their loyalty to a company or brand. This psychology is what drives companies to start rewards programs, which can greatly benefit your brand as people feel more motivated to choose your products or services.

Behaviors Driven by Rewards Programs

A customer loyalty program is designed to give customers rewards when they spend a certain amount or shop at that store a specific number of times. This reward might be given in the form of credit towards a future purchase or a free gift. No matter how a company chooses to reward its customers, the program services to drive certain behaviors. The concept comes from operant conditioning, which finds that behavior followed by positive reinforcement is more likely to be repeated. Subsequently, behavior that is not reinforced is likely to be extinguished.

A loyalty program can prevent customers from switching from your brand to a competitor, especially if that competitor doesn’t offer any type of program. When you review how your customers are using the rewards program, you can also gain insight into preferences and spending habits. Some loyalty programs are profitable for the customer, such as airline miles programs, and although smaller-scale programs might be more cost-effective, they might not show the same monetary results for the business.

Goals for Increase

The ultimate goals for rewards programs focus on increasing three main categories: affinity, spending, and frequency. A good loyalty program should reward a customer who has an affinity for a specific brand, especially if that customer gets excited about new offers and shares the details with their friends and family. Increasing spending is generally the main goal of a rewards program, but it can also focus on how frequently a customer shops with your company.

Offering a rewards program to your customers is a great way to boost loyalty and increase their spending. Perxi makes it easy to reward your customers with customizable solutions and ways to keep people engaged.