Customer reward schemes explained

Thursday, 15 September 2011 09:45

Online reward schemes could boost custom

Online reward schemes could boost custom

Customer reward schemes are a way for businesses to strengthen new client relationships and refresh old ones by rewarding them for certain behaviours.

This can be done using percentage or fixed discounts, prizes or extra goods, with rewards offered on the basis of, for example, cumulative spending, repeat custom, length of relationship, prompt payment or orders with a high value or in large quantities.

Such initiatives can also be used for customer acquisition and successful strategies can in fact increase a business's market share, reduce attrition rates and improve brand awareness.

The best rewards for acquisitions include travel and cash incentives, gift vouchers and merchandise, although the options for effective programmes are essentially endless.

What companies have to do is conduct extensive research into what would motivate the customer, instead of making presumptions on the matter.

These reward schemes can also help boost customer loyalty and retention.

The key here is to find an incentive that has a clearly perceived value and a broad appeal. Companies looking at introducing these schemes with a view to boosting customer loyalty could find that programmes such as gift vouchers are particularly effective.

These are suitable for any budget, big or small, and can be easily adapted to suit a range of customers, who may have wildly varying interests and tastes.

Reward schemes can also be used to boost loyalty among trade customers, a client base that can often be fickle because they tend to have suppliers coming to them for business.

It is important to persuade such customers to opt for long-term reward schemes, such as an online points-banking system.

This has minimal ongoing or setup costs and can be centrally monitored and controlled, as well as being used as a communication tool to carry out product training and unveil new products to clients.

It also means that a company's overall budget does not have to be increased to be effective; rather, the effect of banking points can be better and have a greater impact than rewarding clients on an ad-hoc basis.

Customers and employees alike could also benefit from being offered a Christmas bonus scheme, which could help improve motivation and morale, as well as retention rates among both groups. 



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