Zain Jaffer, the founder and president of Zain Ventures, a family office that invests in real estate and proptech, is navigating the challenges of the current economy. With talk of a possible recession, expensive debt, and instability in the banking system, businesses are struggling to increase sales in order to stay afloat. For debt-laden businesses, higher interest rates have increased the amount of revenue needed to cover costs, often leading to closures if sales cannot be increased.
One way to maintain sales and keep customers loyal is through rewards programs. Loyalty and rewards programs can incentivize existing customers to continue supporting a business, creating a more stable cash inflow. Small gestures such as giving extra product or offering discounts can go a long way in retaining customers and encouraging repeat business. By taking advantage of the principle of reciprocity, businesses can monetize customer loyalty through rewards programs.
Choosing the right giveaways or rewards is crucial in maintaining customer goodwill. Gifts that are thoughtful and personalized can enhance the customer’s perception of the brand, while generic or inappropriate items may have the opposite effect. Rightsizing the reward to match the customer’s purchase or loyalty level is also important, as it ensures that the gift is perceived as fair and valuable. Surveying customers to understand their preferences can help in selecting the most effective rewards.
It is advisable for businesses to avoid incorporating their political or social beliefs into their rewards and gift programs unless they are willing to risk alienating some customers. Leveraging new developments in digital rewards, such as non-fungible tokens (NFTs), can be an innovative way to engage customers, although the success of these initiatives is still being tested. Companies can experiment with NFTs in certain markets to see if they resonate with their target audience.
In tough economic times, it is important for businesses to focus on reciprocity and the value of rewards programs for customer retention and loyalty. Thoughtfully curated gifts that are appropriate and meaningful can strengthen the bond between a brand and its customers, leading to long-term relationships and sustained sales. By keeping abreast of new developments and trends in the rewards space, businesses can stay competitive and adapt to changing consumer preferences. Designing and implementing a rewards program, regardless of the size of the business, can have a positive impact on customer engagement and overall business survival.
