Rewards vs. Discounts – Which Works Better to Retain Customers?

Posted by Jim Walker

Discounts help both small and large businesses to attract customers and boost sales in the short term. But business relationships fuel repeat purchases which work in the long term. Hence, loyalty programs are known to be more successful as compared to sales and discounts. 

Give incentives to loyal customers and attract new ones 

If you depend only on discounts, you may witness a quick hike in sales. But you cannot guarantee if the customer is coming back once the deal is done. It can drastically reduce your returns. On the other side, offering points, special deals, and limited period offers can reward shoppers as part of loyalty programs and build a healthy relationship. It assures you with high retention rates. 

Your customers are the best promotion tools as they refer you to their family and friends. Incentivize those referrals and give them a reason to share their experience with others. 

Make one-time shoppers your loyal members

If your customers join your loyalty program, they can earn certain points whenever they check-out with their products. It will take you and your customers further. On the other side, they will go to another shop once they get a discount. You can easily turn a visitor into a regular customer with just an offer to join your loyalty program. 

You can integrate a loyalty program with your POS system to choose regular customers for giving your offer. You can showcase the benefits of joining your loyalty program so they will come back for more. They usually forget one-time discounts that they can easily get online. You should offer different deals to turn the deal chasers into your loyal customers. 

It’s time to ditch the slashed prices and big billion sales. Remind your old customers about their points and when they will get more rewards. Motivate them to shop more from your store to win more points. 

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