5 Biggest Mistakes to Avoid When Creating Reward Programs

It’s no secret that customer loyalty is critical to a company’s long-term success. However, encouraging people to stay loyal to your brand requires more than just high-quality products/services. And, reward programs are among the most effective techniques for long-term loyalty.

As per a Forbes report, the cost of acquiring new customers is at least five times more than retaining the existing ones. Also, current clients are 50% more likely to invest in your company’s new products/services; not only this, they tend to spend around 31% more than new customers.

All these stats highlight the importance of retaining existing customers. Businesses try different tactics to ensure that their current consumers keep on investing in their services/products, and rewards like cashback in Australia are among them.

However, not all types of rewards work well. For example, some people may like cashback, but not everyone wants money. Apart from that, copying successful reward programs of others doesn’t mean they will work for you too.

There are many other similar mistakes that organisations make when building a reward or loyalty programs. By knowing these mistakes, you can avoid them and create an impeccable program to retain your customers.

Here are they:

Rewards That Aren’t Rewarding

Many times, businesses launch some reward programs for engagement. In return, they offer nothing. Or, sometimes, companies start a point scheme that takes a long time to convert points into an actual reward.

Remember, your reward program must provide value. If you want people to participate in your program, make sure they get something to be a part of it.

Confusing Reward Programs

There are many examples of expensive reward programs that failed because their organisers couldn’t explain to participants how the program worked.

It’s important for people to understand the working of a loyalty program, and that’s an organiser’s responsibility to explain everything about it. Also, the reward program must be simple, easy to process, and rewarding.

Only One Type of Reward

As discussed, not everyone wants something free. Cashback in Australia can lure some people, but not all of your customers must be looking for money. For example, you must have noticed that people get excited when a brand replies to them on a social media platform.

The best loyalty program contains different types of rewards to make all kinds of customers the part of a reward program.

Long-Term Reward Programs

Some companies start pricey programs, but they still fail. Mostly, it happened because they took so long to provide participants with a reward.

It doesn’t matter how expensive rewards you are giving to your customers, they should be getting them quickly. Instead of starting reward programs that run for months, launch multiple reward programs after every few weeks.

Wrong Rewards

It’s a tactic that some companies follow to grab the attention of their customers. They make a promise of offering big rewards, but when it comes to giving the reward, they provide participants with something else.

Here, you must know that wrong rewards can break your clients’ trust. Also, there are high chances that they will choose some other brand over your company – even if you are offering them more effective products/services than your competitors.


The best reward programs are ones that recognise people, appreciate them staying loyal to your brand, and make them feel special. It could be anything from a discount to vouchers of some brands’ products.

To build a reward program that belongs only to your business, join hands with experienced professionals who build and manage custom programs for companies.

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