Rewards & Incentives
May 12, 2023

Loyalty Spotlight: The Impact And Role Of Rewards In Loyalty Programmes

We’d like to think most business leaders and marketers would agree the ultimate objective and overarching reason for running your own loyalty programme is to generate a sustainable and positive ROI for the business.

Yet the number one challenge faced in getting this ROI equation right is the careful balancing act of managing inputs - such as programme infrastructure, investment, rewards portfolio to name a few - with positive outcomes (i.e., the net benefits generated for the business brought about by active member engagement in the programme itself).

Whatever your core objective is for loyalty, striking the correct balance between what goes in and what comes out is paramount. Whether your aim is hitting commercial targets, shifting brand metrics or positively impacting customer satisfaction, you need to have a clear idea of the end goal in order to put the right stuff in.

A highly influential and impactful part of what goes into the programme is all the great things your customers get access to when they register as members… in short, the loyalty rewards.

Loyalty Rewards drive programme acquisition and engagement

What you put inside the programme - i.e., the rewards, benefits and offers that programme members receive - are ultimately the key lever for creating a programme with real customer impact and strong ROI potential.

But don’t just take our word for it…

Leading loyalty specialist agency in the UK, Mando-Connect, surveyed the population which showed a whopping 88% of customers stated discounts, offers and partners were the main reason for signing up to a loyalty programme. Whilst good offers, rewards and benefits that are always changing and updating were the main reason for staying engaged within a programme.


In this New Zealand Love or Money™ survey from The Point of Loyalty we see that people want rewards to be easier to obtain and for rewards to be instant!


Have a think about a loyalty programme you signed up to recently or one you use on a regular basis… The chances are you will have received an incentive upon joining or gained access to valuable rewards shortly after as you participate in the programme.


Using rewards at important moments along the customer lifecycle is an effective way to drive recruitment and engagement.


Loyalty rewards: getting the balancing act right for optimum impact

There’s several different approaches and models when it comes to running your own reward loyalty programme. More and more brands are going beyond the transactional model (rewarding customers only when they make a purchase) to create more holistic and rewarding customer loyalty experiences that recognise the value of customers beyond the next purchase. Using rewards to incentivise and recognise these behaviours is an effective way of motivating and signalling to customers that you care and value their actions and hard-earned cash.


Clearly, promoting your own products and services within your loyalty programme is a great way for customers to experience more of your brand. Furthermore, there’s the potential for extra commercial benefits with initiatives such as member-get-member referrals, as well as the opportunity of up-selling and cross-selling more products and services, increasing the value of your customers.


However, sometimes there are limitations to what brands can do with their own products and services and, commercially, it doesn’t always make sense to discount items that customers might have paid full price for…


…that’s where the role of brand partners comes in!


Working with brands that complement your own positioning, offering and customer interests can unlock a whole new world of rewards - and is often more cost efficient and appealing than just relying on your own products.


Partner rewards can add huge value to your loyalty offering, giving customers a super relevant breadth and depth of rewards that tune into their personal interests, lifestyles and big passions as well as being tuned into seasonal, topical and cultural moments for optimum customer engagement.


So, the best way to deliver strong rewards is through partnerships, but what does that look like in the real world?

Magic happens when you select prizing that appeals to your customers and work with partners who share your values and passion for the campaign idea.

For example, Vodafone (now One New Zealand) wanted to help bring people together with rewards they could enjoy at home, during the Red Level setting in New Zealand.

Vodafone Rewards teamed up with 32 partners for this ‘Win One Give One’ campaign, which let their customers 'share the love’ by giving them the chance to win one prize for themselves, plus the same prize to gift to a friend.

Over 3000 customers and friends were rewarded during the six-week campaign. You can read the full 'Win One Give One' case study here.

Rewards have the power to create a positive emotional connection with customers, fostering a sense of appreciation and belonging. By continuously evaluating and optimizing the rewards offered in loyalty programs, businesses can ensure long-term success and maximize the benefits of customer loyalty.

At Rapport Group, our team is experienced in developing and optimising loyalty programs that drive customer engagement and growth. If you're looking to develop a loyalty program for your business or want to optimise an existing one, we're here to help!

Next in the series: The role of data in loyalty programmes

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