What Is Rewards Program And What Should Be Considered
A rewards program is offered by companies to their customers as an incentive plan. This is done so that the customers stay loyal towards these companies, keep generating repetitive business for them and also attract more potential customers.
Usually there are many types of rewards programs and there are no set boundaries around the same. Here are some of the examples:
1) offering rewards to customers with discounted or free stuff, post purchase of certain items
2) providing extra benefits to customers who join the programs like ‘VIP’
3) offering coupon, coupon codes and discounts to the existing customers to retain them for future business purposes
4) running competitions for customers where these people would have the probability to win if they purchase from a particular company
5) guaranteeing donations in the name of the customers whenever they purchase from the brand
6) offering rewards to customers who bring in more business
The pros of a rewards program are many like it helps a company retain existing customers and increase sales. Let’s say a company has more sales mostly during tourist seasons, then having a loyal strong customer base means having constant sales all throughout the year, even if it is not a tourist season. It also escalates brand recognition for a company and attracts more new customers with the help of the program. Additionally, the business earns positive reputation through spread of good word of mouth.
If a company wants to implement a rewards program or a loyalty program for the first time, the following things should be considered:
a) Understanding the customer base and doing little homework around them would help to build the appropriate loyalty program. Any such program should be attractive for the customers.
b) Implementation cost should be kept in mind and that should be weighed against the company profits.
c) A loyalty program can be a giant project, so the business should be duly prepared for the project launch completely. The business should run ‘as usual’ during the launch of the program.
d) The staff should be well aware of the advantages of the program and should be ready to promote it to the customers at all times.
All in all, a rewards program is a good thing and can be used by companies to reap benefits, if they can created and executed properly.