Customer loyalty programs have become increasingly popular across many different industries over the last decade. The theory is simple: rewarding a customer when they shop with you will encourage them to keep coming back to you instead of your competitors. Many businesses see loyalty programs as a way to improve customer and brand loyalty, and studies have backed this up: 86% of shoppers said they signed up to a points-based loyalty program to receive rewards, while 65% of people use their loyalty cards every time they visit.

While they may not shop exclusively at the business with the loyalty program, businesses are more likely to retain customers if those customers feel they are getting something back when they shop there. On the face of it, loyalty programs seem to be an effective way of retaining customers, but how exactly does rewarding customers lead to loyalty?

Rewarding customers can form an emotional connection

One of the main ways in which rewarding customers can form loyalty is through an emotional connection. Repeatedly rewarding a customer when they shop with you helps build an emotional commitment. A good loyalty program will always leave the customer satisfied, and that satisfaction drives them to continue shopping with you. Over time, this can form an emotional bond between the customer and your business, forming loyalty.

Though a good loyalty program can help entice customers, there are other things you can do to form an emotional connection with the customer. Personalising your service and providing a consistently enjoyable shopping experience are good ways to make your customers emotionally loyal. A good loyalty program will get the customer interested, and their treatment over a long period of time will get their emotional loyalty.

A good reward system can also make the customer feel like they’re a part of something. One of the most powerful human traits is the desire to be part of a group, and continually rewarding customers can make them feel like they’re a part of the brand, increasing their loyalty.

In order to make an emotional connection with your customers, you’ll want to tailor your rewards program so that it appeals to them specifically. To do this, make sure you know your customers and what they want. Determine what kind of loyalty rewards you should offer, and you can make sure those customers will keep coming back.

Gamifying rewards keeps customers engaged

Emotional loyalty is something that every business should aspire to create but is ultimately a long-term goal. With new customers, encouraging loyalty is more often a result of making them feel like they’re getting something back whenever they shop with you. Many brands do this by gamifying their rewards, adding elements like points-scoring and leaderboards. Adding game design techniques has been shown to increase customer engagement, with customers constantly coming back to unlock the next part of their reward. Gamifying your rewards system can be a great way to build customer loyalty.

Rewarding customers will always make them interested in coming back, but a good reward system can inspire emotional loyalty, which will keep those customers with you for a long time.