Keep Your Reward Plan Simple
It is hard for the customer to comprehend and analyze the point-based system. You need to apply simpler methods as much as possible. For example, if you have considered 14 points for one dollar, then you have made it difficult because 14 is not a round number. When customer fails to understand the system, he/she won’t get engaged with it.
If you are developing an application, it must be quite easy to use. Customer should only know about points and how to use it. Your complicated heavy calculations are of no relevance to them. Things also get complicated when you apply a hybrid method -such as a combination of points and discounts. In this case, your employees will get engaged in explaining things to customers and such issue is time-consuming and will eventually take you away from your objective which is attracting customers to your company.
Unless you offer your system using simplification and understandability, customers and your employees will be discouraged along the way and your business will be significantly affected. A more appealing plan is not necessarily a more comprehensible plan. Customers may get attracted to you but they don’t necessarily stay with you along the way. The more comprehensible, appealing and understandable your customer loyalty and reward plan, the more continuous your customers’ commitment is to you.
The Time Span of Using Loyalty Rewards Redeeming a reward can have a certain limited period of use, like a coupon that must be used only at the end of the month. Putting such limits makes the plan less appealing to customers. A definite time must be selected when the customer must claim the reward. For example, a clothing brand can put a 3-month limitation on birthday gift.
Perhaps the birthday price is high and the brand wants to persuade the customer to buy the product in time so they put limitation on the time of purchase. Other companies may give coupons to customers with a one-month expiration. If the coupon is not redeemed within that period it will be revoked by the company and become voided.