Creating Happy and Engaged Customers in 2025

We all need motivation in life. A drive and desire to work towards a goal or achieve an outcome, and for the most part the reward is in the goal itself, by putting in the work you hope at the end to have gained something from it. So, today we want to ask, what kind of goals motivate your customers to bring them to your products and services? These goals are wrapped up in the subject of customer incentives, strategies which we can implement to motivate our customers into engaging with our business, whilst providing a deepening sense of loyalty, an increase in repeat purchases, and the development of lasting relationships.

As customer expectations continue to evolve into 2025, understanding the role of incentives will be more critical than ever for positioning your business to start 2025 on strong footing.

Why Do We Need Customer Incentives?

Customer incentives perform a multilayered purpose for your business through which you can attract new customers, retain, and return loyal customers, and stand out from your competition.

An incentive is a reason for them to interact with your brand, above and beyond what your brand ordinarily has to offer, it is an offer that is ‘too good to be true,’ except it won’t be for it will be exactly what you deliver.

Incentives are wide-ranging, think of all the things that motivate people in their day-to-day lives, a simple reward will do for most of us, and being provided convenience is another.

I may not want to go to the shop today, but if I receive a small reward for doing so, I may be inclined to change my mind.

I may not want to go to the shop today, but if someone else will drive me there and back, I’ll be happy to make the journey.

And these two elements we find translating easily into customer incentives in a variety of ways. Some we are familiar with, include free shipping on purchases over a certain spend amount, or free delivery for all customers subscribed to your loyalty programme. Gamification comes under the umbrella of providing rewards by making rote engagements exciting and fun, where the emotional spike is the reward. Combine this with the tangible rewards that gamification offers too, then you have both intrinsic and extrinsic incentives working together in gamification and services.

In short, an incentive is a reason for your customers to shop with you and use your services instead of the similar services and products offered by your competitors.

The Basics of Customer Incentives

We divide customer incentives into two main categories: Loyalty Programmes and Customer Incentive Schemes.

Loyalty Programmes are time-based reward systems that reward customers every time they purchase from your business, use your services, or perform certain tasks through one of your various platforms. By belonging to a loyalty programme a customer can benefit in a variety of ways but most often this comes in the form of gaining points that can be exchanged for the aforementioned discounts, products, and perks. We utilise points as a common means of loyalty tracking because it is tangible, easy to understand, and easy to see how your purchases convert into points and how those points convert back into rewards.

Other forms of loyalty programmes include subscription-based programmes such as the ever-popular Amazon Prime subscription model. In exchange for a small monthly fee, which is a direct commitment to brand loyalty, the customer can receive lots of different perks, most importantly for Amazon, including free shipping on all purchases. As an online retailer shipping and distribution is a necessity for Amazon, and the customer will always have to pay the cost. However, if you belong to the loyalty programme then the shipping is covered by your inclusion in the loyalty scheme, and this fact alone is enough to entice customers to sign up, even if they are uninterested in the other perks available. This is what makes it an excellent example of an incentive.

Amazon provides something to their loyal customers that offers both convenience and reward. Conveniently they'll receive their product usually within 24 hours for using Amazon Prime, and over the course of a month, they'll save money on their purchases by never having to pay more than the cost of the subscription on their delivery.

So loyalty programmes provide continuous rewards and incentives, as part of a broader drive to develop long-term loyalty.

Customer Incentive Schemes on the other hand are variable incentives that are applied to more specific situations. So rather than an overarching loyalty programme that rewards customers all year round, a basic customer incentive can be placing a sale as the season comes to an end, helping to clear out old stock for the business, whilst attracting both new and old customers to the store to snap up a bargain.

Customer incentives can also include free gifts with each purchase, be that with the purchase of a particular item, or by reaching a particular purchasing limit.

On top of this customer incentives can be tied into loyalty programmes, and by understanding a customer’s spending habits you can incentivise old customers who haven’t returned for a while by sending exclusive offers and discounts straight to their e-mail inbox, enticing them to return and to check out your new offerings, your enhanced product line, or to engage in your new and improved gamified platforms.

Bespoke Customer Incentives

Customer Incentive Schemes have a few main categories, these are: Gamification Platforms, Embedded Loyalty Programmes, and Reward Schemes. Loyalty Works uses its years of experience and honed expertise to say with confidence that these three avenues are all one needs to encourage and incentivise your customers, build and develop customer loyalty, and finally to increase customer spending.

Gamification Platforms: Loyalty Works has seen the development of Gamification since its modern inception and quickly discovered its efficacy as the new face of loyalty programmes, as well as the new interface between a business and its customers.

Gamification is utilising game-like elements such as points, challenges, leaderboards, interactive elements, and reward unlocking to help engage your customers in a new way. By implementing gamified elements we transform an interaction into an experience, and that experience implicitly encourages a customer to engage with it, such as completing tasks to receive points which can be converted into discounts and money off of their favourite purchases. It takes what can be sometimes a dull and tedious process, and reinvigorates it with something memorable, enjoyable, and ultimately rewarding to the customer, which creates those positive emotional experiences that breeds loyalty to a company, platform, or service.

Loyalty Works are experts at implementing Gamification into your chosen strategy, be they loyalty programmes, incentive schemes and more, and provide tailored and bespoke solutions for you and your business.

Embedded Loyalty Programmes: An embedded loyalty programme goes hand in hand with gamification, though they differ slightly. Gamification is how one might dress up an embedded loyalty programme to encourage further interaction and frequent use, whereas an embedded loyalty programme is what the gamification element is encouraging you to interact with. Embedded loyalty programmes are seamlessly integrated through some sort of portal, be that a website or mobile app, or even an in-store kiosk, that tracks a user's usage and engagement, and provides points and discounts on the fly, so the customer's purchases and rewards go seamlessly hand in hand, in an easy to understand format and with a direct and simple way to interact with and utilise.

At Loyalty Works we built our business around loyalty, and have years of experience designing, implementing and managing effective B2B loyalty programmes as well as targeted B2C loyalty programmes.

Reward Schemes: A Reward Scheme is the thread that runs through a loyalty programme, weaving its various parts together, but they can also stand alone when being used to incentivise customers into a specific action.

A good way to think of it is the difference between a gym membership (a loyalty programme) and attending classes (a rewards scheme). The loyalty programme gives you access to the whole gym; by purchasing a membership you get the benefits of accessing the gym's services and classes whenever you would like. But actually turning up to be at the gym is incentivised by the reward scheme, which in this analogy would be attending a class with a qualified instructor.

A person may attend the gym just for that class, and that’s what makes it a reward scheme, it is a particular offering intended to incentivise a particular customer to come purchase a product or use a service. Whereas, a loyalty programme is something which can give you access to all of the benefits on offer, and not just a few.

So, we use reward schemes when we're trying to encourage a specific usage of our brand or business, whereas we use loyalty schemes to foster long-term relationships with our customers, and a reward scheme might be an integrated aspect of that loyalty programme already.

To receive expert help on implementing reward schemes into your own loyalty strategies, reach out to Loyalty Works today and check out our comprehensive services which cover reward schemes as well as fulfilment and much, much more.

Customer Loyalty Programmes

So, how are customer loyalty programmes going to benefit your business? Well here at Loyalty Works we have found lots of success through our bespoke loyalty programmes and the three main elements each loyalty programme aims to deliver are: Customer Retention, Brand Awareness and Customer Satisfaction.

Customer Retention: Customers are thankful for generosity, and they are thankful for their time and money being valued, and an incentive scheme or loyalty programme recognises this and provides that value for your customers. Whilst some customers have come to expect free gifts, discounts and so on, most customers appreciate being appreciated and would rather be loyal to a business that recognises this than spend time and money on a business that doesn’t. So implementing an appropriate loyalty programme or incentive scheme develops the foundation of loyalty, and has your customers coming back for more. To this end, research has demonstrated that increasing your customer retention by just 5% can lead to profit increases of up to 95%. This is because loyal customers are more likely to engage in repeat purchases and be more invested in the brand, leading them to purchase the more premium products that your brand offers.

Brand Awareness: Customers, as we have discussed, appreciate value and generosity, so much so that they love to share their exclusive deals and offerings with everyone they know. A well-implemented loyalty programme or reward scheme doesn’t just incentivise customers to return to you, it encourages them to tell their friends and family so they can share in the same deals, or simply just for the bragging rights. Whatever the reason, a happy customer is motivated to spread the good word of your brand to others, providing positive feedback, heightening brand awareness, and acting as a brand advocate through organic word-of-mouth marketing.

Customer Satisfaction: And finally, an appreciated customer is a satisfied customer. A customer whose emotional view of the brand is a positive one will always score higher on customer satisfaction surveys which is part of the reason they become spontaneous brand advocates for you and your business. The way to create such customers is by providing excellent offers, rewards, and engagement through well-thought-out and expertly planned Loyalty Programmes and Customer Incentive Schemes.

Conclusion

So all in all a good Customer Incentive Scheme can be baked organically into an accompanying Loyalty Programme, or used to create specific outcomes or achieve certain goals within your business. The benefits of doing this are that you will see an uptick in customer spending, increased customer satisfaction, greater brand awareness as well as a positive brand image, and ultimately you will retain more loyal customers.

To implement a successful incentive scheme then, is to invest in the continued growth and profitability of your brand, and Loyalty Works have the expertise and know-how to drive you and your business into an exciting new venture through 2025 and beyond.