What is with all the reward programs, from this company or another. Now some of the major companies are uniting to create a unified program. One such program is called Plenti, which works with Macy’s, AT&T, and Exxon, just to name a few.
All these reward programs essentially do the same thing. Sing-up, some with more information than others. With that membership you typically get some kind of discount(s), and you’ll receive rewards in some way for spending X amount of dollars with that company.
But why do we sign-up for said programs? Well, it makes us feel good to get a reward for spending money, or we think that, yes this is a great price with my membership. In some cases, it is a good price, but for others, you’re paying out the nose still. Some grocery store chains have reward programs that give you said discount and you’re still paying one and a half or more for the product(s) than you would at their competitors. But it’s the same product, so why pay more?
I should note that I worked for a major grocery chain, actually two. However, only one had a rewards program. You bought their products, either the name brand, the off brand, or the stores “value” brand, and you did get what you paid for in some cases. While other things were easily cheaper at other stores. But people were paying for the name. They felt like they were getting a deal. Buy 4 cases of soda and save $1 per case, or whatever the actual deal was.
I want to preface my next paragraph with the knowledge that I have worked for companies with rewards programs, and currently am employed by a company with a rewards program. Also that my knowledge of the rewards programs and how they work come from a store employee end, and not from a corporate end. However over the years, I’ve learned a lot about how these programs work, from other people within the company.
These programs do serve another purpose. They help the company figure out what people like, even how much people spend. Now they don’t look at the program and see that Jane spends $274 a month, on average, and she likes this beer, that line of cookware, or that she buys a lot of avocados. They do see that members like the new line of flatware, or that they typically only buy new bakeware when it’s on sale, or that during this member only sale they average $45 a transaction. Maybe even that they really like brand X of pasta over brand Y.
All in all, I feel like these rewards programs are a bit much. Some companies, fortunately, none that I have worked for, really push them to the point of stressing out their employees. Some, from stories I’ve heard around the water cooler or through employees of said companies, have said that they will fire someone if they don’t meet a sign-up quota. Customers don’t like the programs completely as there are almost always fine print details that they either didn’t read, don’t care, or occasionally simply weren’t aware of. They also don’t like having to give out a phone number, or an email, or even additional information. Typically they feel that it will take to long.
All this being said, the typically consumer, in my experience as a retail worker and even as a customer, wants something they don’t have to pay for. So scratch out the rewards programs that you have to pay for, as well as the credit cards that some companies offer. They also want an easy signup that is fast. Unfortunately, I don’t have all the answers. But I do know that the company I work for signs customers up at the register with a ten digit number, that doesn’t have to be a phone number, and an email. However, they must visit a website to set their password, and confirm their information. This in my experience has been the best process so far, for a more in-depth program. While other simply give you a card or a key ring card that you scan. Most of those programs are typical for gas stations, though and don’t work with major retailers.
In the end, as a consumer, I love the idea of saving or getting something back. It can encourage people to spend regularly, or even spend more. From a business perspective, I can see the advantage and why you’d want to start or continue your program. However as a person, I could just do without them, and being asked to signup for them. Plus I’ll be honest I can’t be bothered to check them most of the time. Well, I do like the programs that give me a free cup of coffee after I purchase typically 6 or 12. But I’m a coffee fiend. I know, I know you can’t have it all.
I do believe that part of these programs is to encourage people to shop through positive reinforcement. Hey good for you, you’ve spent money with us, come back and spend more and with this coupon or with all those points you’ve added up you’ll get a nice discount.
I’d love to hear from anyone on where they stand on reward programs, or why you as a business person are for or against them.