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Customer Rewards Program: The Science Behind How It Works

customer rewards program
Posted by BayIQ on March 8, 2018 | 0 Comments


Today’s consumer is a whole new beast. They are smart, fast, well-informed, and eager to get the most bang for their buck. They also expect an incredibly personalized experience from the businesses they buy from - especially those to which they are the most loyal. And part of that personalized experience is having a solid customer rewards program in place.

If you want to retain these customers and turn them in to rabid fans, you’ve probably given some thought to the kind of rewards program that you are providing. In a recent blog post, we discussed how to build a customer loyalty program for the auto industry - but if you’re not convinced that you need one at all, you might be surprised to find that there is a plethora of science that says otherwise.

Social Identity Theory and the Customer Rewards Program

Psychologist Henri Tajfel famously proposed the idea of social identity theory in the late 1970s, which states that people construct their social identity based on the groups that they belong to. Tajfel found that the groups which people belonged to were an important source of pride and self-esteem. They provided individuals with a sense of belonging in a social world. We categorize ourselves into “in-groups” and “out-groups”, and we feel an intensified sense of loyalty to our in-groups.

Fast forward to 2018 and not only does social identity theory continue to hold up, but in a world increasingly driven by social interactions, you could argue that it is more relevant than ever.

When it comes to marketing your business, we can leverage social identity theory to establish customer loyalty. By giving your brand users a common identity or offering rewards in exchange for a sustained consumer relationship, you can establish an “in-group” that feels exclusive and special -- even if it’s available to everyone.

Your Customer Rewards Program Lets You Explore Shared Values

Did you know that 64% of consumers who report feeling a relationship with a particular brand said that shared values were a contributing factor to their purchasing decision? A good customer rewards program is an excellent opportunity to show off your business’s values, beliefs, and efforts at giving back to the community where you work.

This could be realized in a variety of different ways. In the auto industry, perhaps you choose to prioritize environmental protection efforts. You may offer a reduced rate on more sustainable alternatives to traditional services, or offer to plant a tree and combat deforestation for every $1,000 that a customer spends in your shop. Build your values into your rewards and use them as a catalyst for creating meaningful relationships with your most loyal consumers.

Can you manufacture a customer rewards program?

The short answer is no. You cannot require your consumers to be loyal to your business, your brand, or your service. The long answer, however, is a lot more optimistic. By creating a loyalty program that makes your customers feel valued, heard, and part of an exclusive group, you can encourage them to return to you for repeat business. 


Do you want to create better marketing for your tire and service business? Our automated platform can help you find and retain customers and take your business to the next level. Schedule a demo today to find out more.


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Tags: customer rewards, customer loyalty, how to get customers