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Why Intangible Rewards Can Sometimes Be More Valuable Than Dollars

What do you think would excite your customer more? A 15% discount on a tire rotation or being notified that they have been elevated to VIP status in your loyalty rewards program?

You may be surprised that just as many customers respond positively to intangible rewards, such as an elevation in status, or feeling like they contributed to a good cause, as they do to monetary rewards. Think of that movie “Up In the Air” where George Clooney’s character was laser-focused on making the “10 million mile” club. And what did he get for it? A cool new card, a glass of champagne and a 1-800 number with an operator that greeted him by name.

Some younger people are really into their social media status: think of people who visit restaurants so they can earn another badge on Foursquare, or shell out their own dollars to buy seeds to elevate their Farmville status.


Yet many marketers still focus on providing rewards only in the form of tangible points and dollars. This is key to every program, of course, but it wouldn’t hurt to include intangible rewards too. One example of this is the outdoor retailer, REI. The company uses social responsibility as a type of reward for its loyalty members, who become co-op program members. At the end of every year, REI pays them a dividend and outlines how program participants have contributed to the greater good just by being a member.


What do your customers care about? If you are involved in community activities that you’re proud of, maybe there’s a way to incorporate customer involvement through your loyalty program. In addition to discounts, you could do a promotion such as “for every dollar loyalty members spend, we’ll donate X amount to (your favorite cause).” Combining intangible rewards with tangible rewards is a great way to boost awareness of your loyalty program, and may encourage those customers that don’t respond to discounts or dollars in the same way they do to increased status or a good cause.


What other types of “intangible” rewards do you think customers respond to?

What suggestions do you have for incorporating “intangible” rewards into your loyalty program?

Views: 262

Tags: LoyaltyTrac, MediaTrac, customer, loyalty, programs, retention


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Comment by Mike Gorun on October 19, 2012 at 4:34pm

Thank you for the feedback. Loyalty rewards programs have been proven to work when executed properly. I find that with the right balance of service rewards and intangible rewards, the customer remains loyal to the dealership. 

Comment by Kim Essenmacher on October 17, 2012 at 1:34pm

You hit the nail on the head with this article Mike! Folks want to feel appreciated by the companies that they give their business to and a loyalty program does just that. Also, knowing that their money can help a local cause is many times more important than saving a few dollars. It is a win for the dealership, the customer and the charity involved.

Comment by Brittany Elizabeth Richter on October 17, 2012 at 7:34am

Mike, I like this post a lot. I think that you're right, that sometimes just a "status" can incentivize someone. Loyalty programs overall, I think, are underrated in the dealership and can help build a loyal customer who will spread the word about service AND sales to their networks (word of mouth and via social media). This is a good idea and one I'll be sharing with clients. Thanks for sharing!

Comment by Brandon McGrath on October 17, 2012 at 6:49am

I completely agree with this blog. In retrospect, a customer can only use that 15% discount once, while an upgrade in status to VIP is used over and over. I completely agree that in today's society its all about status and self-worth. Great blog!

Comment by Roosevelt Gist on October 16, 2012 at 3:37pm

Customers respond to being on the inside and first to get insider info on upcoming products.

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