Rewards Beat Discounts for Consumer Engagement

Companies that offer reward-based promotions report higher year-over-year revenue growth and average profit margin per customer compared to those that offer discounts, according to new research from Blackhawk Network. The main reasons rewards programs are offered, according to the research, are to deepen engagement, build loyalty, and show appreciation to program participants.

While 87 percent of program managers surveyed report reward programs being highly valued by customers and 79 percent report that rewards programs positively impact business performance, only 47 percent offer reward programs to customers, according to the Blackhawk researchers.

Across the industries surveyed, programs offering digital rewards were the most popular. Ninety-two percent of respondents cited digital gift cards as the most powerful digital incentives, followed by unique codes for online gift cards (90 percent), online gift card catalogs with point-exchange offers (89 percent), digital open-loop prepaid cards (87 percent), and reward cards that can be added to mobile wallets (86 percent).

Program managers reported prioritizing convenience, cost-effectiveness, and speed of delivery in selecting reward options for their incentives programs.

“Businesses have long seen the value in rewards programs, but many are overlooking the measurable demand for consumer reward programs,” said Theresa McEndree, vice president of marketing at Blackhawk Network. “Today, rewards programs are easier to implement with fully digital, personalized, and customizable options that can be simply managed and quickly delivered.”