Many businesses employ loyalty and rewards programs to help them engage with their customers and form lasting relationships that help them drive more sales and acquire more customers long-term. Offering rewards to your customers not only makes them feel good in the moment, but can help to establish your business as their go-to supplier for your goods and/or services.
You want your customers to feel good when interacting with your business. Never forget that. If customers have a negative experience, you can bet that's the last time they will be shopping with you. If they get excited, feel appreciated, and experience great service, they'll have to think twice before shopping with your competitor.
Good experiences are often tough to come by as a consumer. Think about the last 5 places you shopped at (in person) and whether or not you would consider all of them to be good experiences. Do you think anyone put much thought into how you felt while you were there? Now think about unpacking your new smartphone. The experience is so much more positive in every way. You can tell there was a lot of care and thought put into how you are feeling in that exact moment. The mood you are in when shopping greatly impacts your willingness to become a patron with any business.
When you give your customers rewards, they feel good. Dopamine starts being released in their brains and they associate a positive experience with your brand. If they feel good now, they expect they will feel good every time they shop with you in the future.
When you give someone a discount code, there is only one way for them to get value from it - to use it. Discount codes are great for getting people who may not otherwise buy from you to make a purchase.
Think about it this way - if I have a product for sale that is $100, and you think that's too steep of a price, you may not buy it. If I offered you a discount code to get 25% off you may think that price is more fair and be willing to make the purchase. Alternatively, if I had marked the product's price at $75, you may think its it not as valuable as its $100 competition. So here, a discount gives the impression of value while offering a product and competitive price and meeting the customers expectations.
Everyone has a smartphone these days. This means its easier than ever to pull the phone out of your pocket at a moment's notice and price check any product in the world. If your competitor is offering the same (or even a similar) product to what you are selling at a lower cost, you can bet your customer is aware.
So what can you do to get potential customers to choose you over your competitor? Give them stake in shopping with you. If you reward them for the amount of money they spend with you and set goals they can reach to get better rewards, then customers will be much less likely to shop with your competition where they can't work toward their goals.
For instance, if you offer a reward for a free t-shirt for 1000 points, then your customers will be gradually getting closer to the goal each time they shop with you. Say they average 100 points per order at your store, then after 10 orders they would be eligible to get a free shirt. But if they shopped with your competitor 2 of those 10 times, then they would need to place 12 orders in total to get the shirt.
When customers refer their friends to their favorite brands, many times its more than just a recommendation. People want to recommend brands to their friends that will make them look good. If you tell your friend about these great new comfortable shorts and he buys a pair and loves them, then he will thank you for telling him and you two will share in your love of these super comfortable shorts. Maybe you each tell another friend and now there are a handful of you who all love your shorts. You have a community of short lovers. This can happen with your brand too.
Many times, people want to tell their friends about a business, but forget or don't know how to do it easily. If you can offer an easy way for people to refer friends and earn rewards, then you are not only creating a facility for viral growth, but actively incentivizing it.
Offering a rewards program to your customers is not only a smart thing to do, but it is an imperative in today's marketplace. There are many tools available to help you get started. Start retaining your customers in an elegant and fun way. Drive more sales and customer engagement through a loyalty rewards system that will future-proof your business.
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