Reward Customers Earlier

rewards just ahead

Customers should be rewarded earlier and more often in the relationship they establish with vendors.

This is true of any type of customer and any type of business. Keurig does a nice job of providing members with 10% off purchases. That’s not a ton of money when you’re buying coffee, but it’s something. More importantly, it’s an instantaneous and ongoing reward for being a member. On the flip side, Aeroplan is such a ridiculous program that you never feel like you’ll get anything (on top of which the experience with most airlines is painful.)

Discounts are an obvious way of rewarding customers, but there are other creative ways too. Everyone likes receiving presents. Hand-written thank you notes work too. Surprise ‘em and they’ll pay you.

If you build a reward program into your strategy, make the early rewards achievable and addictive. This is where a bit of smart gamification comes in handy. Some companies reward loyalty (or try to), but very few reward customers earlier on, after one or two purchases, before loyalty is proven. And I think that’s a mistake.

The reward sign picture is courtesy of Shutterstock.

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January 9, 2012 Posted in Marketing by Ben Yoskovitz

http://askaaronlee.com Aaron Lee

Hi Ben,

Interesting post here, I do have to ask why do your thoughts on why you think rewarding customers after one/two purchases is a mistake as we other businesses are already doing it so we do use other methods instead. I own a small clothing business online, we do send presents, include thank you notes which our customers love but usually we don’t give discounts for first time customers. Normally ton second purchase as most of them return from the first purchase. Perhaps the thank you note helps? Love to hear your thoughts on the discounts though.
http://www.instigatorblog.com Benjamin Yoskovitz

Aaron – I think you may have misread. I think you SHOULD reward customers earlier – after a single purchase, or two purchases …

Most companies reward loyalty once it’s “proven” but very few reward customers earlier than that.

It wouldn’t surprise me if your thank you notes for first-time buyers help motivate people to purchase a second time, third time, etc. — creating loyalty.
http://askaaronlee.com Aaron Lee

OMG, I totally misinterpreted that part. My apologies about that! I feel so embarrassed now and i think i need to sleep after this (3am here)

Thank you so much for clearing it up! Awesome post!
Asd Maro

http://ngoooom.ahlamuntada.com
http://theblakefirm.com Austin Business Lawyer

In general, I agree. However, companies often do themselves an injustice by reaching for the discount button to reward clients. Hopefully your customers buy your product or service based on quality rather than price. Too much discounting, special offers, etc. can do long term damage to the perceived value of the offering. Instead of offering a discount, why don’t you supply them with a short term upgrade to your premium service or product. It may cost the same amount of money to the company making the offer, but it has the opportunity to up-sell the customer in later transactions, instead of creating a customer base that expects discounts and deals.
http://www.instigatorblog.com Benjamin Yoskovitz

I agree that a discount isn’t the only way to reward customers – early in the purchasing process and later, when they’re loyal. It’s one option, but not the only, and there may be other options that reward customers effectively without de-valuing your offering.

Thanks for the comment.
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Ben Yoskovitz

I'm VP Product at GoInstant.

I'm also a Founding Partner at Year One Labs, an early stage accelerator in Montreal. Previously I founded Standout Jobs (and sold it).

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