What is the psychology behind loyalty programs?
Offering points essentially allows you to invent your own currency. Points are priceless ties to your business and a blank slate for creativity. In a difficult economy, a picky customer needs every reason to keep spending their money at your business. Plus, it is much more difficult for a customer to shop at your competition when they are 20 points away from that free reward. Points also allow you to introduce customers to your entire product line by offering new products or services as the rewards.
