Consumers are Motivated by Loyalty Programs

Lauren Krause
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Loyalty rewards programs have seen steady increases in popularity over the years, and are a useful means for successful branding. Consumers can be easily motivated or influenced by the right kinds of loyalty programs, and offering them can lure customers who are weighing shopping options. Companies looking to establish a strong brand and a loyal consumer base can do so for the price of some simple consumer rewards, though choosing the right rewards is critical.

Some companies, especially those on a tight budget, may not see the benefits of offering customer rewards through loyalty programs, but rewards programs can be an excellent consumer motivator. While starting a loyalty program is not a guaranteed success, choosing the right rewards can give small companies or those struggling with brand appeal a much-needed boost.

To illustrate this with an example, imagine two competing grocery stores in the same neighborhood, offering similar products at similar prices. One of the stores decides to offer a loyalty program that gives shoppers discounts for reaching various levels in a points system — the more they shop, the more points they get, and the bigger discount they get in return. When consumers in that neighborhood are deciding where to buy groceries, they can choose to spend the same amount of money in either store, but earn future discounts at only one. This seems like an obvious choice.

Although offering points and discounts through loyalty programs gets consumers in the door, it does take a bit more to motivate customers to develop a deeper, long-lasting brand loyalty. The most successful brands that incorporate consumer rewards programs use the tactic as one part of a larger strategy in constantly building and expanding.

Loyalty programs set the table for both bricks-and-mortar retail establishments and online marketplaces alike. It has the power to motivate new, curious, thrifty shoppers and retain those who may be persuaded elsewhere if not given incentive to stay. Clearly, loyalty programs are important pieces to a larger puzzle.

When it comes to loyalty programs, not just any reward will do. Consumers are motivated to take part in rewards programs that offer them something useful. Discounts and coupons should be geared toward giving consumers the things they want or need. If offering coupons instead of general discounts, loyalty programs should operate in conjunction with a consumer-tracking system to determine the spending habits of each shopper and then offer each of them rewards based on their purchasing patterns. Likewise, loyalty programs that reward consumers with free gifts should offer a selection of things that people actually want.

Loyalty programs are not the end-all solution for increasing brand loyalty, but they can play a pivotal role in gaining or retaining customers. In cases of close competition, these loyalty programs can be the deciding factor. Choosing the right rewards is one of the most crucial aspects of any loyalty program. Brand loyalty is built over time, and consistently useful discounts are a safe bet for strengthening the brand and consumer relationship.


Photo courtesy of stockimages at FreeDigitalPhotos.net

 

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