Reward Customers And Watch Your Business Grow

Reward card programs come in many different forms but all have the same objective customer retention

. With so much competition in every marketplace, holding onto valued customers is a must. Learning how to effectively start up a reward program from the outset is vitally important. Tweaking the formula whilst already live may confuse your customers - people generally do not like change. So what are the most effective programs?

Some businesses offer what is known as a continuous reinforcement reward like free shipping with every order or 5% discount on orders over $100. This type of reward card program is normally well received, as the customer knows exactly where they stand without having to read the small print. Another popular reward program is known as ratio rewards, based on repetition. This is commonly used by food chains as it encourages customers to keep coming back to eventually get a free meal. For example, Nandos restaurant will stamp a customers reward card every time they eat in one of their establishments and then depending on how much is spent, the next time a customer returns, they will be entitled to either a free drink or free food.

Interval rewards are based on time. This reward program can vary from a store's annual sale to a daily lunch special from 11 a.m. to 2 p.m. The variable version includes radio contests that grant prizes "sometime this hour." You don't know exactly when, but basically it's every hour. And of course the most common and one we all utilize the most is Happy Hour, with bars offering drinks 2 for 1 or half price at various times of the week.

Finally and perhaps becoming the most commonly used reward program is a points card system. Here, points (or something similar) are accrued, then traded for goods. Most of the large supermarkets now have these types of card and are a great customer retention tool. A points card exhibits traits similar to fixed ratio rewards, though rewards can vary based on the number of points used. Because a customer can buy different rewards based on varying number of points, there's always the potential of getting a reward.

So for any business thinking of starting a reward card program, although the end goal will always be customer retention, how its achieved will vary. Thought must go into what type of customers a business attracts, how regularly they will use a service and if the reward program ended, would the customer still return.

by: Richard Wilkins

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