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How Rewards Effect Customer Loyalty

Loyal Customers Want to Be Rewarded

A current (January 2016) article in Marketing News magazine, a publication of the American Marketing Association provides a summary of a larger study on the effects of customer loyalty on retail pricing.  In the “The Buzz“, an insight into scholarly study “Willing to Pay More, Eager to Pay Less: The Role of Customer Loyalty in Price Negotiations” shows some interesting information on offering discounts to customers.  In essence, offering continuous discounts to clients creates a “downward spiral” of pricing.  This means that the more discounts you offer a customer to maintain repeat business lowers your profit.  The article also states that “Loyal customers want to be rewarded, but rewards don’t have to be discounts”.  How can you be creative in your marketing efforts to reward your clientele without giving them discounts?  Easy!  The study shows that “free gifts”…. stand as effective gestures to customer loyalty”.  There are lots of ways and price points to give gifts.  

  • Promotional Gifts
    • Promotional products can serve two purposes for your business.  They can be branded with your company information while at the same time, be a free gift and hopefully be a useful item that will be used and/or seen daily
  • Executive Gifts 
    • Want to offer something a little, nicer, a little more perceived value, this category offers tons of ideas within your budget but can look and feel much more expensive that they are
  • Personalized Gifts
    • These are very, very cool.  You can personalized each gift with your logo AND the clients name and/or company.  Click here to see an example
  • Incentive Gifts
    • There are the Granddaddy of gifts.  These can be Top Brand/Name Brand Merchandise that can be branded and unbranded for your customer.  You can purchase the products as one-offs or create a branded web site where your customers can orders these types of gifts using a code you give them.  You can even give codes out that work for different price points.  C

All in all, giving your clients gifts is a perfect way to gather continuing loyalty from your customers.