An effective loyalty program can be used to positively influence a customer’s behaviour. When devising a loyalty program, there may be several reasons for a business’s creation of the program.
Regardless of whether the business is looking for customer preference insights, increased revenue on certain products or services or ensuring customers stay loyal and don’t defect to a competitor, the method is the same. We want to encourage and positively reinforce desired behaviours in the customer toward the brand.
Reinforcement is an incredibly important concept for loyalty programs and when a business is creating a loyalty strategy they should consider where they can acknowledge or reward desired consumer behaviour throughout the customer journey. As people are more likely to repeat the action if they are positively rewarded or acknowledged.
Another facet to using rewards to influence consumer behaviour is having rewards that are both attractive and achievable for the consumer. This proposition drives customer behaviour and ensures a greater success for the company’s loyalty programs.
Creating achievable goals for customers to earn rewards can influence customers behaviour because research shows customers people love approach gradients and tend to increase their spend as they get closer to their redemption goal. It is important that customer feel like they are making progress towards their goal otherwise they will not engage.
A seamless redemption experience can often be overlooked but it’s incredibly important to the customer’s experience which influences their future engagement with a brand. Those that successfully redeem are more likely to repeat in the future, so it is important to ensure the experience is good for them.
Companies worried about reward costs to achieve this level of influence shouldn’t disregard the impact of acknowledgement. A simple “Thank you” at the right time can have a great impact on a person’s perception of a brand and their overall customer experience.
In conclusion, rewards, when executed correctly, can positively influence customer behaviour. Thought and planning are pivotal to the effect of these rewards and what they potentially can achieve. Brands need to consider all aspects of the customer journey, types of rewards and the goals for customers in order to achieve the desired customer behaviour.