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Customer Rewards Schemes – Do They Really Work?

26 November 2021

customer reward schemes

Customer reward schemes are proven to encourage customer loyalty and retention, as well as increase sales, across a range of different industries. 

The upsurge of entrepreneurship over the past two decades has created a wave of new businesses in almost every single industry. Now, business owners are facing more competition than ever – each brand competing not only to win new customers but also build loyalty with their existing customer base.

Customer reward schemes have been a staple of businesses worldwide since American Airlines launched their Frequent Flier program in 1981, which is widely considered to be the first full-scale loyalty scheme of the modern era.

Now, almost every retailer offers a customer reward scheme. But what actually are they? Do they really work?

What is a customer reward scheme?

A customer reward scheme is a marketing strategy that recognises and rewards customers who regularly engage or purchase goods from a brand. Having a scheme like this in place, companies can provide their clients with points or perks and graduate them through scheme-tiers the more they buy. It follows a simple exchange; to receive rewards, customers must follow a particular action like a purchase or sign-up, etc.

Providing your customers with an additional product, discount, or service with a purchase is an effective way to reinforce a buying decision and build customer loyalty through methods such as loyalty cards. These reward schemes can come in various forms such as a points-based system, a tiered program, a cashback program, a discount program, offering free gifts, offers that are personalised to a consumer or even a referral program.

The benefits and drawbacks of customer reward schemes

A customer reward scheme seems impressive. But before you employ this marketing system in a business, you must evaluate the benefits and negatives to guarantee suitability for the company.



What organisations use customer reward schemes?

Organisations around the globe have applied customer reward schemes within their business strategies for years. Since new, innovative, and high-tech systems have been developed around this marketing strategy, it’s almost rare not to find a company using a reward scheme.

Any customer-based industry can implement a loyalty scheme; from hospitality and retail, to telecommunications and petroleum (we’ve all been asked for our loyalty cards at the petrol station). However, each is tailored to its unique target audience.

How do they utilise them?

As mentioned, there are various loyalty reward schemes out there, which can be attached to an app or a loyalty card. Each has its benefits and, depending on the business’s structure, can provide excellent returns. The three most popular reward schemes tend to be:

So, do customer reward schemes really work?

For businesses, customer loyalty increases profits, improves sales success and allows for sustainable growth. A well-designed and well-executed loyalty programme can help you retain existing customers, attract new customers, and drive profits.

And it seems that customers can see the value too. Nearly 6 in 10 UK adults believe that brands should offer loyalty programmes, and almost 60% of internet users cite ‘earning rewards’ as one of the most valued aspects of the retail shopping experience.

The average repeat customer spends 67% more in month 31-36 than they spend in month 0-6. 95% of companies report that their loyalty members spend more annually than non-members, and almost 50% of consumers actively admit that this is true about themselves.

What Orion can do for your Customer Reward Scheme

Membership and loyalty cards for different businesses

Customer reward schemes are proven to encourage customer loyalty and retention, as well as increase sales, across a range of different industries.

We are one of the UK’s leading manufacturers of plastic loyalty cards for major retailers, banks, incentive groups, restaurant chains, sporting clubs, experience providers, as well as online retailers, helping them to achieve significant sales and performance targets driven through various loyalty schemes.

Our plastic card printing capabilities include many security features and design elements such as:

We also have the capability to provide loyalty and membership programme fulfilment as a service, both digitally and physically.

Please speak to a member of our friendly sales team who will listen to your needs and help advise with the best solutions available.