Rewards = Customer Loyalty

This weekend, I received my Starbucks Gold Card in the mail, which made me extremely happy. Why, you may ask? Not only because this little card means that I get cool things like two free hours of Wi-Fi and free drink customization, but also that this was a company recognizing the fact that I consume insane amounts of its product. It was a sign of appreciation from a place where I spend hours of my time and a good chunk of my spending money. It was the equivalent of saying, "Hey, thanks for coming to see us so often! We think that's awesome, so we got you this present!"

Why is that significant? Well, I'm about to put on my Public Relations student hat and tell you. People like recognition. They like to feel their contributions are appreciated, even the apparently insignificant contributions such as everyday purchases of groceries or coffee. When customers feel appreciation, i.e. through rewards, they respond with brand/company loyalty. Now that I have my rewards card, I want to show Starbucks I'm grateful for their recognition by continuing to make my coffee/tea purchases there.

Another reason why rewarding customers is an excellent loyalty-building tool is that it makes customers feel special. When I go into Starbucks and pull out my personalized, shiny, gold card, I'm doing something that not everyone has the option of doing. Therefore, Starbucks is giving me the opportunity to participate in an exclusive activity. Say that something's exclusive and try to make it sound unappealing. Not possible.

Finally, since I now know I'm rewarded for each purchase, I have more of an incentive to go to Starbucks over another coffee shop that will not let me add a double shot of vanilla to my Misto for free. This leads me to mention another company that has a similar practice - Kroger. Through using my Kroger card, I get in-store discounts, points that add up to 10 cents off my next fuel purchase, and coupons sent to my house that are for things I actually buy! So when I go grocery shopping, I'm going to go to Kroger so that when my gas tank's getting close to "E" and I pull up to the pump, the display will read, "Would you like to use your 10 cents off?"

So, in conclusion, if a company wants to increase customer loyalty, they should tell their customers, "Hey, you know, you are a real special group of people, and we just want to say thanks for picking us," and customer rewards programs are an excellent way to say just that.