In an effort to build brand loyalty, most brands include a rewards program in their branding strategies. How effective are these programs? Are they really building brand loyalty, or are they simply building reward program loyalty?

Brand loyalty isn’t what it was decades ago. Today, consumers want to be courted, they want exclusive information, privileges, engagement with freedom of expression, opportunities to grow, and other advantages that come with genuine relationships.

Authentic brand loyalty begins with a consumer’s desire to have a relationship with your brand. This is where traditional points-and-rewards programs fall short. There’s no relationship building in these branding strategies – only semi-immediate gratification, followed by a reward that puts clients back to zero…right alongside brand newcomers.

The Psychology of Rewards in Branding Strategies

Let’s dissect the progression of the typical points-and-reward program.

A customer makes a purchase and, based on the monetary value of that purchase, receives points toward a future reward. They might get a punch on a card or a digital compilation – the method is unimportant.

During the point-accumulation stage, the customer assigns value to those points. The monetary value of the points is enhanced by feelings of savings and equity, future potential of reward, goal-achievement, security, and financial mastery. The person might begin to feel challenged, competitively. Self-esteem is bolstered, thanks to a sense of personal accomplishment. And as points accumulate, tension builds. The anticipation of reward becomes very real.

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Photo Credit: Krishnan Gopakumar

During this phase, the value that the participant has assigned to those points is much higher than the actual value of the points.

Then comes the reward. It is bound to be a disappointment. Not only is its value less than the customer’s psyche had assigned to it, that customer must start all over again, with nothing to show for all that effort.

Great Branding Strategies “Stick to the Point”

What this tells us at How to Build a Brand, the creators of branding strategies and the reward programs that support them, is that we need to focus on the relationship-building portion of loyalty packages, rather than the rewards. We need to gratify the psyche. Tangible rewards simply aren’t enough – they’re too rational to motivate relationship-building with today’s emotionally driven consumer.

No two loyalty programs will be equally effective for two different brands. Branding strategies are tailored per brand, as loyalty programs should be. Whilst devising one that’s perfect for your audience, think about the types of people who express a desire to build a relationship with your brand. Are they simply interested in being part of a group? Are they proactive and ready to work toward a cause? Or are they highly competitive, with a desire to stand out from the crowd?

The best branding strategies and their rewards programs keep to the point – that is, they utilise the psychological effects of the points portion of traditional reward packages. This is the part that builds relationships.

Take things like involvement with your brand and time spent as loyal clients into account, and provide your most active participants with the most rewarding experiences. By making these considerations, you will build a rewards program that isn’t the sole reason for loyalty, but rather supports authentic loyalty to your brand.

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