We are conditioned from an early age that good performance is rewarded. It happened to us a 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.