Why Are Rewards So Important?
What are rewards, and why do they work?
Rewards are something given in recognition of service, effort, or achievement. They can be reward points, discounts, freebies, exclusive sales, and more.
Rewards are effective because of the principle of reciprocity. Like the analogy, “an eye for an eye,” we give back what we receive. At MLP, we focus on a mixture of rewards that give back.
In one of our recent campaigns, with Arnold Clark, we created a campaign in which customers received a gift-with-purchase. The mixture of gifts was either an overnight stay for two, a £50 Amazon Gift Card, or a Road Angel Halo-Go Dashcam. These rewards work well as they give the customer different choices of rewards, suiting a wider range of customers – something for everyone.
Not to mention – Rewards increase brand loyalty. By offering exclusive discounts to loyal customers, you are reminding them that you value them, continuing to build value in your brand. Recent studies have shown, 48% of people will steer clear of brands that do not offer deals.
Rewards create Happiness
Simply, saving money makes people happier. Scientists have discovered that coupon recipients who received a £10 voucher, experienced a 38% rise in oxytocin levels and were 11% happier than those who had not received a coupon. In turn, this can create a positive association with your brand when customers recall it later, as they will associate the positive feeling that they experienced with your company.
New Customers and Existing Customers
Discounts will attract new customers and might be just the thing to draw them into becoming loyal customers. 80% admit they would try a new brand if were offered a discount. New customers also mean new opportunities for cross-sells and upsells, meaning more revenue in the long run.
Discounts are not only a way to acquire new customers, they are also a way to show your gratitude to your existing customers. The discount acknowledges the customer’s track record and persuades them to increase spending and buy products more frequently.
Employee satisfaction just isn’t possible without showing teams how much you appreciate what they do. By recognising wins, you are sending a direct message, showing that they matter to you and the company. This helps employees feel seen, heard, and valued, which are all required for satisfaction at work.
Heading out of the pandemic and back to normality, we have seen it has allowed employees to shine and demonstrate the huge value they bring to their organisations. With limited face-to-face connections more and more companies have realised the importance of reward and recognition and how crucial it is to show appreciation to your workforce. We have been working closely with PSA to create an Employee Recognition Platform which has been built with employee engagement in mind. This has been made available to around 2,000 dealer staff across the Peugeot, Citroen and DS dealer network. We run fun engaging content and incentives such as ‘Free Lunch Fridays’ where everyone in the dealership can benefit from the programme – with lunch on PSAF.
For more info on what MLP do, head to our portfolio page here – mlp.agency/portfolio/