The biggest lever for growth isn’t always about driving more traffic to an online store. It’s not even about convincing potential customers to buy. Even more important to a brand is what happens after a customer converts. This is where a digital rewards platform earns its keep.
But how do these platforms work? And maybe more importantly, how can digital reward platforms improve loyalty in a measurable way that feels like spending more ad dollars on growing a customer base?
Brands already spend heavily to get new customers, and they’re planning to spend more. According to Nielsen, 48% of marketers in North America prioritize growth and brand awareness equally, not post-conversion spend. But it’s easy to overlook that 54% of global marketers are planning to reduce ad spend, thanks to “evolving market dynamics.”1
In other words, those “evolving market dynamics” have made it so that purely spending more on ads isn’t enough to do well as a business online. Businesses have to delight their customers. For that, a digital rewards platform is a way to keep customers coming back. The market size for digital rewards platforms could grow to $113 billion by 2034 in the U.S. alone.2
It’s all part of a customer reward program. Ideally, a customer takes action (like making a purchase) and in return, the business rewards them to reinforce the behavior. The more rewards, the more likely it is that the customer will come back for more.
There are a few common formats for digital rewards platforms, such as:
Can digital rewards platforms actually work to grow customer engagement, retention and revenue? According to some customer loyalty statistics, customers do respond strongly to rewards when they’re more immediate—which is what digital rewards platforms offer.3
Consider the following digital reward platform statistics:
What it means: Redemption alone isn’t responsible for the increased engagement. Increased spend can raise average order values. As customers become more “connected” with the brand, they feel more comfortable spending more. Digital rewards have a way of spurring on that connected feeling.
What it means: This is one of the most direct statistics showing the impact of rewards on how customers behave. Even if some customers think of loyalty and digital rewards as “passive” perks, the stats show they’re more active in using these to guide future buying habits.
What it means: Loyalty is a bit of a battleground, a key growth strategy for brands who know how powerful these digital connections can be. Few statistics prove the power of loyalty programs better than seeing retailers put their investment dollars to work.
What it means: Consumers are not only more likely to stay at a brand because of the program, but will spend more as they stay at the program.
What it means: Digital rewards are powerful. Higher participation shows the “social proof” aspect of digital rewards. If someone you know is buying from another retailer because they like the rewards, it might influence your behavior.
What it means: Today, consumers have many choices for where they can spend their limited budgets. Loyalty programs help brands give their customers another reason to choose them over the competition.
What it means: It’s not a stretch to say that incentives like these keep customers coming back. In the customers’ minds, they’re being paid for continued loyalty. If they’re shopping for a new widget anyway, why not use the discount or credit points they already have on a digital platform they’ve enjoyed before?
Let’s go a bit beyond the basic logic above, though. Simply paying customers for loyalty makes sense, but what specific psychological triggers are at work here? Understanding how digital reward platforms improve loyalty means looking at the mechanics underneath the points.
A customer reward program’s primary goal is behavioral reinforcement. The principles of gamification show us how powerfully a treat works to keep customers coming back.10
After all, when a customer earns points or rewards after a purchase, it’s a friendly little “ding!” that says: good job. This creates a positive feedback loop: Action → reward. To get more rewards, something as simple as a new purchase is all that’s required.
Digital rewards programs—by offering its little moments of delight like earning points or unlocking new tiers—can create emotional context. What does this mean? If a customer experiences little delights like earning points when buying socks at one store, and not another, they’ll likely start to feel loyalty toward the store that provides them with delight (as well as socks). After all, socks are everywhere. But only one shop has the emotional experience that feels like it’s building up to something.
Now imagine being a customer who’s already bought five clothing items from one store. That’s 950 loyalty points before 1,000 unlocks a new tier. Are they really going to switch brands when there’ s just 50 more points to go?
Probably not.
This creates a higher switching cost,11 reinforcing brand loyalty and reward program retention.
The statistics bear out a fundamental truth: people like returning to stores when they feel incentivized to do so. But let’s explore the deeper psychology behind why this works.
After all, a digital rewards platform isn’t hard to acquire these days. Lots of businesses provide one. What makes the stickiest loyalty programs work so well?
Focus on a few key psychological triggers:
Ultimately, a good digital rewards platform isn’t just about throwing points and rewards at customers. Yes, that helps, and you can make a lot of friends that way. But it takes a long-term view of what digital rewards look like, and what customers actually enjoy using, to make it all work—driving up customer lifetime value and increasing the revenue at your brand.
Access Development can give your loyalty program something most digital rewards platforms can't match: the nation's largest private discount network, with savings across travel, dining, retail, and entertainment that your customers are already spending money on. Whether you're building a customer reward program from scratch or looking to add real depth to one that's already running, Access Development brings the scale, the flexibility, and the proven results to make loyalty mean something.
Contact us to start a conversation about what loyalty could look like for your organization.