Rewards & Recognition Programs – Get to Know the Best Strategies to Follow

by | Oct 18, 2022 | Loyalty Programs

What if you get a reward for something you have done? It would make your day extraordinary and motivate you to repeat the task. The same applies to marketing too. This blog tries to give you insights on rewards & recognition program, an effective loyalty program tactic used by the top brands.

What are reward and recognition programs? Rewards & recognition programs are a vital strategy used in marketing to build loyalty among the individuals who stay connected with a business. Don’t you cherish the surprising birthday wishes or the thank you note from your favorite brand? That’s a kind of recognition the business offers you as their prestigious customer. Similarly, employee rewards & recognition programs reward employees for their contributions to the success of a business.

Rewards & Recognition programs, at any level, improve the entire experience of the community, which naturally drives them to be a part of the business repeatedly. It may encourage people to stick with the brand even after the reward has been eliminated.

Surveys report that the brand experience impacts 75 % of the customers’ purchase decisions. Rewards influence 66% of the customers in their spending decision. When it comes to marketing, rewards and recognition programs may involve retailers, wholesalers, distributors, promoters, customers, etc., involved in the market chain. In this blog, we mainly discuss rewards and recognition programs for customers.

How to Design a Rewards & Recognition Program?

Unlike other marketing strategies, designing any loyalty program for your brand should be done with more vigilance. Rewards & recognition programs designed for your business should ultimately aim to make the customer feel enticed and proud of the bond they share with you. You should understand their expectations from your brand.

Customizing the programs as per the nature of the customers would make them feel taken care of. The aim of the reward and recognition strategy should be to reward the existing customers and encourage the new customers to stay with you.

Benefits of Rewards & Recognition Programs

Ideal rewards and recognition schemes should aim at establishing the following factors.

  • Increasing loyalty among the customers.
  • Increasing in foot traffic.
  • Prompting the customers to make repeated purchases with you.
  • Reducing seasonal downturns.
  • Lead generation.
  • Improve brand reputation.
  • Boosting sales and profit.

The Best Rewards & Recognition Programs

Let us now find out the top 10 rewards and recognition schemes proven to be effective by most of the giant brands in India.

Points and Credit System

The most prevalent incentive system employed by most businesses is the points and credit system. It works by rewarding clients with points or credits for each purchase they make. They can redeem the points and credits they’ve earned through future purchases.

Points and credit-based rewards & recognition programs are always trendy since they give the impression of being rewarded right away. Customers would redeem the credits for further purchases, which would help the business retain customers. It enables consumers to save money in the future when they spend their points.

It’s also a fantastic idea to provide your clients with gifts, travel coupons, discounts, and other incentives in exchange for their points or credits.

Tier-based programs

Tier-based schemes are one of the rewards and recognition strategies that evolved from the points and credit system. The central concept is that consumers will be rewarded with credit or points, and with repeated credits, customers will be able to proceed to higher levels. The consumer will advance to the next level after earning a particular number of points, and with each level, they are sure to celebrate more benefits and perks from the business.

The best example of this type of rewards & recognition program is categorizing the customers like silver, gold, platinum, diamond, and so on based on their purchases and relationship with the business. The business would provide customers with unique and individualized rewards at each level, incentivizing them to proceed to the next.

Spend-Based Programs

What is spend-based loyalty program? Spend-based rewards & recognition programs reward the customers based on their purchases or the money they spend. These types of programs apply to different types of customers like new customers, loyal customers, insistent customers, impulse customers, etc.

Spending-based rewards & recognition consider and reward those customers who spend a lot more

than others. Higher-spending customers will receive customized offers, discounts, and prizes based on their spending patterns. Such rewards and recognition programs make the customers feel valued and encourage them to shop further.

Spend-based reward programs may be customized as per the nature of the brand and the behavior of the customers. Some businesses provide loyalty points or stamp their customers as per the amount they spend with them.

Item-based spend system is another strategy where customers are rewarded for the repeated purchase of a particular product or category. This strategy helps in marketing certain products and, at the same time, rewarding the customers for their purchase decision.

Membership Programs

Membership programs focus on personalized membership cards for valued customers. Accepting the membership card entitles the customer to a variety of goodies from the brand, including discounts, free coupons, gifts, GST exemptions, exclusive services, and more.

Customers can use membership cards to explore the business to its maximum. It promotes customer loyalty and makes them feel special. Membership cards with a lifelong validity, coverage across India, and family coverage, among other features, assist in retaining clients and increasing revenue.


Discounts and money savings are always the best things that can immediately trigger a customer to shop. When brands announce discount sales for their anniversary or special occasions, it creates a positive customer aura to purchase. Loyalty discounts help a business reward its loyal customers and retain them, whereas the customers benefit from super-saving purchases.

Targeted discounts or discounts for a particular group of beloved customers can help a brand build its reputation tremendously. For instance, some brands offer discounts to senior citizens, new moms, or cancer survivors, which allows the brand to draw more attention and loyalty.

Subscription Programs

A subscription program is a paid rewards and recognition loyalty program in which the customers pay a one-time charge in exchange for the valuable benefits they redeem. Subscription programs are proven successful for bigshots like Amazon Prime, Netflix, and Spotify. Subscription-based reward and recognition programs of Amazon Prime entice the customers to the best through express deliveries, free added services, and so on.

Studies report that customers would not hesitate to pay a fee to access special perks from their favorite brands. This, in turn, enhances the emotional connection between the brand and its customers. Through well-planned subscription programs, the brand can experience an immediate hike in sales and revenue. On the other hand, the customers will also be satisfied with additional benefits like gifts, discounts, fast or free shipping, free value-added services, etc.

By nurturing the customers through subscription programs, the business would get to know the expectations and preferences of the customers. subscription programs help brands to make their customers travel with them, beating the competitor domains.

Cashback Programs

Nothing can make customers happier than getting their money returned to go shopping again. Cashback programs are somewhat similar to the credit system in which instead of the credits, the customer receive a percentage of the money they have spent. It is one of the rewards & recognition programs used mainly by businesses offering financial services.

Cashback programs are easy to sign up for the customers and provide a high level of satisfaction. When the customers redeem the offer, it further adds up to the sales of the business. The main advantage and disadvantage of cashback programs are that, in most cases, it does not differentiate the new and the existing customers. The feature may attract new customers while dissatisfying the current customers.

Refer a Friend Programs

As the name indicates, refer a friend program focuses on rewarding the existing customers when they refer the business to their dear and near ones. It is an approach that encourages positive consumer behavior. A referral bonus is an excellent addition to any loyalty program implemented in a business.

Rewarding the existing customers for referring other customers who share the brand name and reputation. It helps to spread brand awareness among the public. The customers, in turn, get rewarded for referring the business.

A well-planned rewards & recognition scheme should recognize the loyal, constant customers and the switching customers. When they feel recognized and valued, customers will prefer to stay with the business consistently. It’s all about how well they are motivated and rewarded.

Having understood how impactful rewards & recognition programs could be for your business, you have to find out which program would fit you the best. Never follow a template. It may not work for you. How you recognize and reward your customers should go well with your brand voice.

When the marketplace is full of your competitors who offer rewards & recognition programs, how to stay unique? Customize the best rewards and recognition program exclusively for your customers and add a personal touch to it. Be creative in recognizing your customers, and they will feel motivated to associate with you.

Most businesses fail to identify and address their business objectives while designing a rewards and recognition program. Framing a rewards scheme without proper research and planning will not help them in any way, rather than investment efforts and time. Monitoring and assessment of the existing rewards & recognition programs should be done parallelly to understand the merits and demerits. This will help the business formulate better rewards and recognition ideas in the future.

When going hand-in-hand with other marketing tactics, rewards and recognition can enhance customer base and loyalty to unbelievable levels. To design overriding rewards and recognition programs, seek the help of an expert marketing agency like ADVAN. AD Vantage Marketing provides the clients the best loyalty program services in India, with unique rewards & recognition ideas.

When it’s the time to recognize your customers and value them, never take a chance.


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