Do Loyalty Programs Actually Work?

loyalty programs work paladin data posWhy have a loyalty program? Do they actually work?

We all know what they say about loyalty programs, but is it true? Does a promise of saving a few pennies actually inspire loyalty? Are they worth your investment?

Answer this question: If you were shopping for sneakers and you hold a rewards card to The Thrifty Sneaker, would you shop at Shoes with a Soul? Chances are, you wouldn’t. Why?

Pack Mentality

Loyalty programs provide you with a way for your customers to feel like they connect with your business – they are part of something. They will feel loyal to your store simply because their name is on a list somewhere on your computer and your card is in their pocket. It’s simple, but it works. Why?

According to Susan Fiske, a Professor at Princeton University, the need to belong is a very real need. Psychologists call it the pack mentality. Every one of us wants to be accepted into a group such as a sports team, a family, or a clique at work. This pack mentality is an emotional and mental need to give and receive affection from others that are similar to ourselves. Fiske has found that we join groups that are full of people who like the same things (such as television shows, styles of clothing, or celebrities) or who have similar opinions.

A girl who loves dolls will play with other children who enjoy them. A skate-boarder will undoubtedly find a group of people who skate. People like to relate to others who are similar to them.

In the past, it was difficult to survive on your own. Straying from the pack meant fighting for your life and trying to avoid starvation. Every one of us wants a family, a nation, or a world that we are familiar with and belong to.

Free Advertising!

Science has proven the more times you see something, the more present it is in your mind. In fact, we don’t need to consciously be aware of a thing for it to affect us.

Derren Brown has studied the mind for over a decade, and has come up with a way to explain subconscious advertising. He is able to influence thought with subtle signs and images.

To test his theory, Brown took two marketers and drove them through the city to their destination where he told them to create a logo.

Beforehand, Brown made a logo that he predicted would be similar to the one the marketers would create. When the marketers finished, the logos were compared.

They looked almost identical!

How did this happen? Derren Brown had placed many images and symbols on the route to the office. When the marketers were taken to the building they were exposed to subtle images and slogans that related to their project. They had no recollection of ever seeing them, but both marketers were affected nonetheless. Based on these symbols and images, Brown was able to correctly predict the finished product.

What’s my point? The key chain and card offered by Rich Rewards are walking advertisements. How many times do you look at your keys throughout the day? The customer is reminded of your store every time he uses his keys, whether he consciously acknowledges it or not.

The end result? When they need a hammer, your store will be the first they think of.

Reciprocation Principle

Have you ever received a gift for Christmas from someone you weren’t planning on giving a gift to? I have. I am immediately filled with anti-holiday cheer and bolt to the store. Why couldn’t I just accept the gift? Why do I feel like I have to give one in return?

I blame it on the reciprocation principle. It states that people feel inclined to give when they receive something.

I’m sure you know where I’m going with this. Rich Rewards provides you with a way to give to your customers, making them more inclined to spend money at your store. The end result,  you make more money.


A rewards program makes managing customers without an account in Paladin simple and easy.

By scanning a costumer’s rewards card, all of their past transactions can be viewed. Even though they may not have an account in Paladin, you still have a way to keep track of their purchases.

If a customer is asking about the mulch they purchased last week, you can easily pull up the transaction using their rewards card. Rich Rewards makes it easier to please the customer. In the end, it’s all about customer satisfaction.

It Works!

To be blunt: it’s a way to bring customers back. If your customers are saving money, they will continue shopping at your store. Rich Rewards is a way to give money back to the customer.

When a customer signs up to Paladin’s Rich Rewards, they receive a coupon at the end of their receipt. It is a simple, easy way to hand over rewards and give the customer the option of redeeming them. Every time they scan their card, the purchase is recorded on their account for easy tracking.

The “My Rich Rewards” program offers coupons from $5 to $50 in 5 dollar increments, that can be applied as payment on the customer’s next purchase – if their receipt is redeemed. Every time the customer spends $250, they get $5 off. In order to get the money, the receipt must be brought back to the store.

Rich Rewards offers a compelling reason to return to your store, and it is easy to use. All the customer has to do is use their key chain card to link their purchase to their rewards account.

Rich Rewards are a way of giving your customer benefits and increasing store sales.

So, Is Rich Rewards worth it?

Yes. According to Jose Alvarez, a senior lecturer at Harvard Business School, loyalty programs are incredibly affective.

  • It creates loyalty by giving your customer something to belong to — the pack mentality.
  • The key chain is constantly reminding the customer of your store — advertising.
  • It motivates your customers to invest in your company because you invested in them — the reciprocation principle.
  • Finally, it provides you with a way to keep track of new customer’s past transactions — convenient.

Do loyalty programs actually work? Yes. In the end, it all comes down to the customer. Customer satisfaction makes or breaks your store. Rich Rewards is one more way to keep your customer’s happy and coming back.

To get Rich Rewards for your store call 800-725-2346.

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