Digital Rewards Platforms vs. Physical Rewards Programs

Running a rewards program for repeat customers is a great way to encourage more sales, improve the customer experience and build customer loyalty. Loyal customers spend up to 67% more than new customers, so it’s important to keep them coming back.

When choosing a reward program, it’s important to think about how each type of rewards scheme will benefit your business and appeal to customers.

What is a Physical Rewards Program?

Physical rewards programs are found in coffee shops, supermarkets, and other places where people visit the physical location and shop regularly.

In most cases, this type of loyalty program uses a paper card that is stamped, punched or gets a sticker each time the customer makes a purchase. Once the card is full, it can be exchanged for a reward such as a free coffee or a small gift.

Physical rewards programs are quick and cheap to set up and easy to use, but they’re not as flexible as digital reward programs.

What is a Digital Rewards Program?

More businesses have now shifted their reward program to a digital scheme. In this type of reward program, the customer will have a digital account.

Rather than collecting a single stamp at the time of purchase, the customer’s account will be credited with points, which can be exchanged for physical or digital rewards via a digital platform.

Types of digital rewards might include:

  • eGift cards and eVouchers (such as mobile recharge vouchers and cinema tickets)
  • Travel offers and experiences (such as drive a sports car for a day or try skydiving)
  • Entertainment
  • Dining and restaurant offers

Benefits of Digital Programs

While digital reward programs may take a little more effort to set up than merely handing out a card to customers, they offer a huge number of benefits over traditional physical reward schemes for both business and customer.

No Need For Physical Card

While many digital reward schemes offer their customers a reward card to make it easier to have their points credited when making a physical purchase, it can be substituted in-store or online by inputting the user name or number.

This eliminates the problem of physical cards being lost or forgotten and also reduces the risk of fraud by forging stamps or staff stealing or giving away extra stamps.

Personalisation and Variety of Choice

Electronic schemes provide the ability to greet the customer by name when they log into their online rewards console, which is a great way to build brand loyalty.

Offers can also be personalised to customers depending on their shopping habits, previous purchase history, demographics, or other criteria. For example, you could offer extra points or a special offer on their birthday.

Traditional physical reward schemes are also limited regarding choice – generally, everyone gets the same reward for a certain number of stamps. With an online system, customers have the option to trade their points in for whatever they want and to either cash in their points frequently for smaller rewards or to save up their points for a more valuable reward.

Easy to Turn On and Off Different Offers

Physical reward schemes may lead to disappointment if the advertised reward runs out of stock.

Digital reward schemes make it easy to instantly activate or deactivate different offers, run seasonal offers, or special time-limited offers. For example, double-points for one weekend only.

Easy to Track Customer Behaviour

Linking customer purchases to an online account (even if their purchases are made in store) allows an accurate picture of their shopping habits and behaviour, which can then be used for segmented marketing.

You can also quickly create online surveys and questionnaires via the rewards portal to find out even more about your customers.

Mobility and Instant Delivery of Digital Purchases

Physical rewards must be produced, stored, and often shipped out to customers if it’s not possible to physically hand them over in-store.

Digital purchases remove most of these associated costs and logistics, and they can be instantly delivered to a customer’s email or mobile phone.

GPS technology also provides the possibility of delivering rewards “on the go” and based on location. For example, you could present a limited offer to a customer via their mobile phone while they’re shopping in-store.

Digital “Community Hub”

When a customer logs into their online rewards, you have an additional marketing opportunity to communicate with them and get sponsors or other partners involved to promote their brand and offers.

Digital reward programs can also be tied into marketing campaigns run on social media (providing digital points for a Tweet or a share on Facebook for example) and help to drive online engagement as a whole.

Physical or Digital Rewards? The Choice is Yours

Regardless of the reward scheme you choose, it’s important to perform a cost analysis to ensure your business stays profitable and the rewards are sufficiently enticing to encourage customer participation.

Get in touch with us today to discuss taking your business to the next level with a customised Rewards Program.

2018-05-22T10:40:22+00:00