We are conditioned from an early age that good performance is rewarded. It happened to us as children, as adults we do it, and we use it to teach our pets.
Rewards are not really bribes, unless the intent is there to alter a behaviour or to expect a favour in return. Rewards are there to say thank you for continued service. But what if you give a reward with the intention of changing someone’s purchasing behaviour; what if your intention is to condition your customer to purchase more from you so that they will earn more rewards. Is a loyalty program in fact a legalised bribery?
I think, before the lawyers shut me down to clarify an important point; Bribes are provided for current or future favourable representations or advantageous consideration. A loyalty program, although makes the promise of a benefit, is never expected to be cashed in. I don’t have any research data to quote, but anecdotally, if you need to spend $100000 with a merchant or merchant group to qualify for a toaster, then I think that not too many toasters will be given away.
As margins tighten, the degree of difficulty to achieve a reward increases.
I carry my reward card in my wallet. I use it occasionally, but as an informed consumer I do not see the benefit of over paying for a product to receive 1/100000 cent benefit return, when the shop next door offers me a 50% discount. I don’t think that I am particularly smart, just a regular Joe. So if I can see how this works then your customers will see the same.
Reward programs should be exactly that – a reward for shopping with you, a thank you. The benefits should not be so unattainable that your reward program quickly attains zero value once the euphoria of a new card in the purse or wallet has subsided.
If you want to thank your customers, then do just that, say thank you. If you want to give them all a rose next Wednesday, then do that. Make a gift unconditional. Make it a surprise, and make it memorable. You will get far more traction doing this rather than expecting your customers to spend a lifetime accumulating points that essentially have zero value.
They will see right through your crap attempt to buy them over. Trust me, because I see it every day.
