by Aayushi Thakur Sinha
Consider this. It’s time to restock your essential skincare products. You visit your closest mall and head towards the well-stocked multi-brand beauty store. You pick everything you need and head to the cashier. “Are you a privilege member?” the sales rep. asks.
Within seconds, you’re out the door with a new card in your wallet and a new member of an exclusive club.
Rewards are practically begging to be found and they’re everywhere — local coffee shops, airlines, credit card companies, and more. There’s certainly something so satisfying about winning a juicy cashback or a free sample and it feels like good value — a little treat just for shopping there. For companies, it’s a way of attracting and retaining customers.
Known as loyalty marketing, this method taps into the psychology of reward and motivation by incentivising repeat purchases. It also helps businesses create databases of information that help them personalise customer experience.
According to Accenture, more than 90% of companies have some sort of loyalty program. Harvard Business Review recently discussed how “loyalty leaders” (companies with leading satisfaction rankings) grow revenues roughly 2.5 times as fast as their industry peers. Further, Canadian marketing agency Bond mentioned how over 70% of customers were more likely to recommend and keep buying from brands with solid loyalty programs in place. Such programs can be helpful to businesses, especially since the pandemic has made it even harder for brands to engage with customers consistently. But do these rewards actually help customers save money or are they just a data-collecting scheme?
In short, rewards can help you save money… provided you’re able to understand your spending patterns.
Here’s a secret: you don’t need to sign up for all of them! And if you want to know your spending patterns better, consider signing up for Passbook, SALT’s exclusive app that is designed to help you become wiser about your monthly expenses!
Loyalty programs are designed to keep you coming back to make sure you spend more. To avoid getting stuck in a spending loop, do your research before you sign up for that new credit card or agree to hand over your personal data to a department store. Consider how you live day-to-day. If you’re not a beauty junkie or don’t buy your coffee from the same café regularly, skip the rewards card!
Conversely, if you find a good loyalty program that suits your lifestyle and needs, it’s a good idea to “earn and burn”. Try using the rewards as quickly as you earn them unless they expire or get devalued. Instant benefits will also go a long way in optimizing your satisfaction with the program.
If you need any more convincing, look no further than the highly pervasive, laser-focused, instantly usable, and possibly the most successful loyalty program today: Amazon Prime.
Loyalty marketing is an effective tool for your brands to get the most out of you, the customer. Just make sure you’re able to get the most out of them as well without breaking a sweat!