Learn how do reward programs contribute to increase sales and maintain the relationship with customers.reward program, sales, customers

How do reward programs contribute to increasing sales?

By  Tarek Ghobar , Co-Founder .

The many options available in the market and the rapid changes in the business world and technology have made customers more educated and intelligent when choosing the brand or service provider they want to buy or deal with. Therefore, brand owners and service providers have to make a greater effort to attract customers and maintain that relationship.

What are the challenges facing both brands and service providers?

The majority of brands face the same issues in trying to gain new customers in an increasingly crowded market: too many loyalty programs, differentiation is minimal, competing for customer attention, and increasing customer expectation. These issues can be addressed with loyalty programs with the right engagement, but communication is key.

According to a KPMG study, 85% of the increase in profits comes from effective rewards programs. However, in a recent CodeBroker report, 65% of customers actively engage in less than half of the rewards programs they are members of, either because they do not know how to redeem their loyalty points or their dissatisfaction with the service in general, which is a huge lost opportunity.

How to increase the effectiveness of your rewards program?

First and foremost make sure you inform customers of the program effectively and consistently communicate the points accrued whether by e-mail or app notifications, as 23% of customers report not knowing about the existence of their loyalty points account.

Second, providing an easy and seamless way of redeeming the points or exchanging them for items of use is critical, as 90% of users report not redeeming due to the difficulty of the process or the many steps required. Lastly, providing diverse redemption options increases the engagement of the customer and keeps the program relevant to their lifestyle that further connects them to the brand.

Learn about the main factors to consider when building a Customer Loyalty Program

What if I am not able to afford a rewards program? 

Keep in mind that loyalty programs are also very diverse and there are many ways of rewarding customers than just a points system. There are many free or cheap customer loyalty tools to use that won't break the bank, but the most important is to understand your customer and make sure you are measuring the right behavior.

Although the focus on repeat revenue and bringing the customer back is the main goal, that goal could also be achieved simply through a direct discount on the next order or a free gift with the shipped order for example. So make sure you understand what the customers love about your product or service and use that to get them to come back before you invest in a complex loyalty program. Especially important are also tracking software that shows the customer journey and can tag a returning customer, this way once you are ready for a full-fledged reward program you know exactly what metrics are driving your users to transact.


Got a reward program and looking for redemption options? PointCheckout aggregates thousands of online merchants as redemption options for loyalty programs to plug into. Users simply pay with their points on their favorite online store and spend more on the brand.

Last Updated  July 28, 2019