Things to Consider in Designing A Reward Program

As a POS system service and support provider, we often receive requests from our customers on setting up reward programs. Reward programs could be more effective than other types of promotions because they foster a long-term relationship as compared to coupons or discounts. A good rewards program creates customer loyalty by offering your customers what they need, thus generating value for your customers to keep coming back. Here are some tips on getting the most out of your reward programs.


First, you need to decide the objective of the reward program. Some programs aim to get new customers through referral, others are based on dollars spent or the length of time a customer has been shopping in a store. For retail store that rely on high frequency, you may want to lean toward a program that rewards the number of transactions or dollars spent.

You want the reward program to target the right people, your top 10% frequent shoppers. To know this group, you want to gather information on what they buy, when they buy, how often they buy and what rewards they would value. Data from your POS system along with the right analysis will show you this information. Of course, you do not want to neglect attracting new customers either.

Second, your reward program should offer something that is tangible and a goal that is easy to reach. You should design your data gathering and reporting methodology to get the information from your POS system so you could offer rewards that are meaningful and obtainable to your top customers. When done right, the reward will create excitement among your customers. When they reached the point of redemption, you want to make the redeem process easy.

For any reward program to generate any buzz, you need to reach out to as many customers as possible. Use multiple avenues to spread the word.

Lastly, check out what your competitors are doing. Learn from what they did right and what they missed and work to create your competitive edge.

It is simple for any retailer to offer a reward program. However, with careful planning and the right execution, you could create a reward program that truly generates customer loyalty and attract new customers to help your business grow.