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We have come a long way from the negative and misleading image that reward programs are only for low-income earners. Billionaire investors I know are sure to spend their air miles and take advantage of punch cards and loyalty systems at local family-run cafes. The traditional approach of building a brand and a loyal customer base is being replaced by rewards programs that disproportionately benefit high spenders. The more consumers spend, the more they earn, creating a virtuous circle for both buyers and sellers.
In a survey of over 50,000 consumers, only 3% When competitors offer cashback or loyalty incentives, it said it will stay true to its top brands.explosion of number of products Marginal price differentials in retail platforms help explain this dramatic change. With so many transactions happening online, consumers are swayed by the best deals, the best reviews, and the best deals.
Since rewards accumulate over time, the goal of these programs is to build an ongoing relationship with customers, especially those who spend the most. It’s a simple equation. Providing the greatest value to our customers ensures that they remain the most loyal.trademark value may not be deadBut this more complex operating environment is being redefined by the need to reward repeat customers.
Related: How brands turn short-term rewards into long-term loyalty
Rewards programs are everywhere
From local juice shops that offer free drinks when you collect 10 stamps, to Amazon Prime and target circle, reward programs are ubiquitous and public awareness is high. In our survey, nearly 80% of people said they were aware of an app or her website that offered purchase rewards. According to software company Oracle, 72% of consumers Belong to at least one loyalty program.
While reviews undoubtedly have a significant impact on consumer choices, it’s clear that spending habits revolve around strategic redemption of reward points. For example, when a Discover Card points to certain vendors that offer extra points for a limited time, consumers will be more likely to spend at those locations. Such strategic initiatives give consumers bonus points, inspire the entire ecosystem, and create win-win scenarios for all involved.
Brand loyalty is also influenced by consumers’ preferred rewards, with two studies split into the #1 category. capgemini 69% of consumers say they prefer cashback over all other perks, Markle We found that 79% of respondents prefer discounts. One constant is that everyone wants to be recognized and appreciated for their loyalty.
What works best for you?
There are two types of loyalty programs: independently hosted programs and externally hosted programs that offer a rewards ecosystem. Whichever you choose, you don’t have to be an enterprise business.
Hosted programs vary from company to company, but this is probably the type you are most familiar with. If you spend enough money or shop enough at a business, you can receive free items and the like from the same business. Nearly every small business now has a punch card or loyalty system that rewards you for visiting regularly, whether it’s at your local coffee shop or a restaurant down the street.
Alternatively, we’re seeing the growth of external loyalty programs that help brands reach new customers. and Reward them for their perseverance. These programs further he can be divided into two categories. One is to partner with individual industries or market segments, such as programs hosted by Ibotta. reward program Some offer rebates at grocers and retailers, and others apply to consumers as a whole.
I call the second type of program an “integration provider”. This type of rewards program has evolved in a unique way because mobile apps allow people to receive rewards and accumulate rewards based on where and when they spend across different stores and brands.
RELATED: 3 Types of Rewards Programs Every Retail Brand Should Know
beyond the game
The explosion of mobile usage over the last decade has unlocked enormous potential for these integrated reward platforms. My company aspires to be the leading channel for consumers to accumulate rewards from diverse means of spending. Initially focused on mobile gaming, it plans to expand to other areas such as fuel, groceries and other areas where consumers are looking for rewards.
One of the main advantages of integration providers is their cumulative nature. This will allow consumers to earn more points than ever before through multiple independent programs. The more consumers spend across different categories, the more rewards they get, creating more value for integration providers. As a result, providers can afford to share more rewards with their customers, allowing them to remain engaged with various vendors. Essentially, this creates a virtuous circle where everyone involved is a winner.
please do your homework
The field of rewards games and mobile rewards programs is relatively unknown. Naturally, people are skeptical about winning gift cards just for playing games. It seems too good to be true. This new and dynamic market shows that brands need to do their homework thoroughly before embarking on these new reward ecosystems.
If you want to use an externally hosted rewards program for your business, know that the market can be volatile. New providers emerge and often die just as quickly if they fail to strike a balance that benefits all stakeholders. Trusted resources are essential for gathering insights and making informed decisions. Major contributors to the app install ecosystem regularly publish performance indices for major publishers. These indices often include information about players in the rewards engagement space and provide a valuable starting point for identifying potential partners.
RELATED: Dunkin’ Donuts customers voice their anger online over higher rewards program
Reward Retention
The consumerist narrative has taken a turn. It’s no longer just about brand loyalty. From local businesses to global corporations, the landscape of innovative rewards programs is expanding, evolving and solidifying their presence. And it’s not just about choice and variety.
Generate repeat customers 65% of company revenue, underscores the key role of rewards programs in customer retention, sustainable business growth and market differentiation. They have become much more than just trends. Rewards programs are an essential strategic tool in today’s consumer market. Brands that recognize this shift and harness the power of rewards will thrive in this dynamic environment, strengthen consumer relationships and ultimately improve bottom lines.