Consumer Reward Programs-An Overview
The consumer rewards program in US are quiet a rage. Consumers are becoming more and more aware of these reward programs that grant special discounts and offers to the consumers. Once the consumers fill out the membership form for reward programs they are given a membership card that looks very much like your credit cards. The sales personnel at the payment counter swipe this membership card so that points are added against the purchase amount. On accumulation of a specified number of points consumers can redeem these for a product. Apart from this there are discounts exclusive for such members. Almost every person is fast availing this consumer reward programs in US as a result of the benefits offered by the retailers.
Why is it so popular?
These reward programs are so successful because the programs offer a mutually beneficial relation. The consumers become loyal to their favourite and most preferred brand. The companies are profited by this loyalty since they can be sure of consumers buying their products. This is irrespective of the economic scenario. Some retailers offer special discounts and gift coupons to their members. Such members are known as 'privileged members'. These members are made to feel special. In some retail brands they do not have to stand in long queues at the payment counter. They can just jump queues as they are loyal consumers. Apart from this they have free parking space in the retail shop and even free home delivery. Some of them also offer free alteration of clothes which would be delivered immediately to privileged consumers. All these become major attraction for the consumers who love being treated royally and made to feel special.
Joint ventures
Many companies have tie-ups with some brands. For example, hotel like Hyatt and Marriott have tie-ups with some air-liners. The frequent flyers are offered free complementary stay in these hotels. Frequent flyers are yet another form of consumer reward programs in US. Businessmen, corporate who fly frequently on business trips are offered a frequent flyer membership by the airline company. These companies have tie-ups with major hotels across the world so that their patrons can avail the facilities of the hotel and that too at discounted prices.
Many leading corporate multi-national companies are also availing this frequent flyer facility. This is because they have employees flying constantly on business trips. When they avail this membership they can also save money on accommodation of the employees.
Some retailers even have joint ventures with gas stations. On buying groceries for retail stores like Wal-Mart, consumers can avail great discounts at gas stations. They can fill fuel up to a certain amount (say $10) for free. This is a great attraction for many people who own vehicles. However, there is a small condition here. Gas fuelling of the vehicle must be done at the gas stations that are located in the retail outlet premises. That is, if there is a gas filling station on the ground floor of Wal-Mart then the consumers must fill gas from that particular gas station only to avail the discount.
Most consumer reward programs in US though seem attractive also come with terms and conditions in fine print which must be carefully read.