# Can rewards become the next currency?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-06-23
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: The Power of Rewards and Loyalty Programmes in Business
Meta Description: Discover why loyalty schemes are becoming currency for businesses and consumers alike, offering benefits and driving customer behaviours.
URL: https://financedigest.com/can-rewards-become-the-next-currencyhtml

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_By **David Handlos,** Founder of Europe’s leading mobile wallet company_ _Stocard_

The power of rewards is on the rise as both companies and consumers see their true value. The rise in popularity is owed to the benefits they present to everyone, and the ease in which they can now be applied. But do they have so much clout that they can be seen as a currency? David Handlos, Founder, [Stocard](about:blank) looks at why loyalty programmes are worth their weight in gold.

Reward schemes are certainly nothing new. The first ones can be traced back to the 1950s when [retailers](https://www.financedigest.com/analysis-u-s-retail-traders-pile-back-into-options-as-meme-stock-mania-flares.html "Analysis-U.S. retail traders pile back into options as meme-stock mania flares") used them as a tactic to get new customers in the door and to keep coming back. Today they’re viewed so popular that [59% of Brits](about:blank) think all organisations should offer them. And organisations are responding with  [90%](about:blank) offering some form of loyalty scheme from Tesco to Barclays and everything in between. We are even starting to [see them adopted by smaller companies and in the B2B world](https://www.financedigest.com/in-u-turn-iea-sees-world-weathering-lost-russian-oil-supply.html "In U-turn, IEA sees world weathering lost Russian oil supply").

**What’s in it for the consumer?**

We all like that feeling that our [money is working](https://www.financedigest.com/working-with-both-human-ai-and-graph-technology-to-combat-money-laundering.html "Working with Both ‘Human’ AI and Graph Technology to Combat Money Laundering") that bit harder for us and rewards offer the perfect way for this. In a way many of us have come to expect some [form of a loyalty scheme when we engage with a company](https://www.financedigest.com/microsoft-videogame-testers-form-companys-first-u-s-union.html "Microsoft videogame testers form company’s first U.S. union") now. In fact, [78%](about:blank) of us would switch to another business based on their reward programme.

**Why do they work for businesses?**

Using rewards to [change customer](https://www.financedigest.com/how-customer-services-has-changed-during-covid.html "How Customer Services Has Changed During Covid") behaviour is a great tool. Now more than ever with the [pandemic reshaping our habits](https://www.financedigest.com/four-bad-communication-habits-that-you-might-have-slipped-into-during-the-pandemic.html "Four bad communication habits that you might have slipped into during the pandemic"), companies need to find ways to help incite change and to stay in touch with their consumers. They can for example take the issue of [busy versus quiet times](https://www.financedigest.com/isnt-it-time-open-banking-delivered-for-businesses.html "Isn’t It Time Open Banking Delivered for Businesses?") in a store. You can offer perks like ‘double points if you shop between 13.00-17.00 on weekdays’. This then helps get people in store time when it’s quiet and also [eases pressure](https://www.financedigest.com/analysis-china-central-bank-under-pressure-to-ease-is-hemmed-in-by-inflation-fed-jitters.html "Analysis-China central bank, under pressure to ease, is hemmed-in by inflation, Fed jitters") on busier periods.

Like in the 1950s many [businesses today still want to attract new customers and then keep them coming back](https://www.financedigest.com/improve-your-business-while-saving-the-planet-and-your-back-with-easycat.html "Improve your business while saving the planet and your back with EasyCat"). Loyalty [programmes are a great way to keep people coming back](https://www.financedigest.com/reckon-one-builds-momentum-with-strong-backing-from-accountants-joining-the-cloud-advisor-programme.html "Reckon One builds momentum with strong backing from accountants joining the Cloud Advisor Programme"), the more customers spend with you the more perks they’re gaining.

It’s also a great way to get people to use [several services](https://www.financedigest.com/outbreak-of-the-covid-19-pandemic-is-expected-to-severely-affect-the-global-packaging-and-labelling-services-market.html "Outbreak of The COVID-19 Pandemic is Expected To Severely Affect The Global Packaging And Labelling Services Market ") you offer. For example, Boots’ advantage [card can not only just be used to buy products](https://www.financedigest.com/over-half-of-britons-say-loyalty-cards-encourage-them-to-buy-a-product-niq.html "Over half of Britons say loyalty cards encourage them to buy a product – NIQ") in the store such as make up and vitamins but also in their opticians. [81% of customers](about:blank) say that being a member encourages them to spend more so it’s a proven way to increase revenue.

**Data can create better profiles**

Early on many companies and brands realised that loyalty schemes were a great way to get [data on customer tracking purchases enabling organisations](https://www.financedigest.com/tackling-the-complexity-of-data-within-financial-organisations.html "Tackling the complexity of data within financial organisations") to create a more precise profile of individual customers.

Building these profiles becomes a powerful asset when it comes to create more personalised offers or adverts to customers. You can also better predict what times people engage with your [business so you can schedule notifications to boost](https://www.financedigest.com/uk-needs-to-make-politically-unpopular-reforms-to-boost-growth-business-group-says.html "UK needs to make politically unpopular reforms to boost growth, business group says") this.

[Companies are now even using the schemes to build these profiles](https://www.financedigest.com/automotive-electronics-market-key-insights-profiling-companies-and-growth-strategies-by-2026.html "Automotive Electronics Market Key Insights, Profiling Companies and Growth Strategies by 2026 ") without relying on sales data. For example, John Lewis offers visitors the chance to win their ‘wish list’ up to £1000 a month. By getting users to create a wish list it shows the products that people are interested in but not purchasing. You can then use this to understand why, perhaps it’s down to price or colour choice and so on.

For us at Stocard, having insights on customer habits is hugely [important as it helps us advise clients on what offers or rewards](https://www.financedigest.com/why-is-employee-reward-and-recognition-so-important.html "Why is employee reward and recognition so important?") would work best for their audience. It also helps us identify cross company partnerships that may fit best based on the shopper’s profile.

**It’s easier to implement**

Thanks to advances in [technology every](https://www.financedigest.com/legislate-raises-3-6m-to-give-startups-smes-the-technology-to-query-and-compare-every-contract.html "Legislate raises .6M to give startups & SMEs the technology to query and compare every contract") business can now integrate reward schemes easily so even smaller companies can utilise them.  Gone are the days when lengthy forms had to be filled out and plastic cards scanned – now it can all be [managed through software](https://www.financedigest.com/document-management-software-market-to-expand-at-a-value-cagr-of-12-3.html "Document Management Software Market to expand at a value CAGR of 12.3%").

[Organisations can now use either their own app like Starbucks or work](https://www.financedigest.com/uk-based-bitfount-raises-5m-seed-to-streamline-collaboration-between-organisations-working-with-sensitive-datasets.html "UK-based Bitfount raises M seed to streamline collaboration between organisations working with sensitive datasets.") with established platforms such as Stocard to facilitate their loyalty programmes. This functionality [offers more convenience](https://www.financedigest.com/convenience-offered-by-home-automation-solutions-to-offer-opportunities-for-market-players-iot-has-encouraged-the-demand.html "Convenience Offered by Home Automation Solutions to Offer Opportunities for Market Players; IoT has Encouraged the Demand") to customers so they’re more likely to use the reward scheme.

**The reward revolution?**

So, as we can see both we and businesses love rewards, but is it time for a shake up? Well, [96% think so, saying companies](about:blank) need to seek new ways to reward consumers. It can’t just be points or a free product anymore, we all want something more sophisticated, [special and impactful](https://www.financedigest.com/impact-com-announces-partnerships-experience-event-ipx-bringing-together-all-players-in-the-partnership-economy-and-featuring-special-guest-trevor-noah.html "impact.com Announces Partnerships Experience Event, iPX, Bringing Together All Players in the Partnership Economy and Featuring Special Guest Trevor Noah").

Take Vivid for example, it’s offering shares to customers as a way of rewarding customers. We expect to see more fintecs and [financial institutions](https://www.financedigest.com/what-financial-institutions-will-be-like-in-10-years.html "What Financial Institutions Will Be Like In 10 Years") adopt more innovative ways to reward.

In addition, we can expect to [see more responsible rewarding as the public](https://www.financedigest.com/italy-slashes-2023-growth-forecast-but-sees-public-finances-improving.html "Italy slashes 2023 growth forecast but sees public finances improving") becomes more aware of environmental and social issues.  [61% said](about:blank) they would rather donate their rewards to a good cause than redeem them personally.

We can see this with the likes of the Co-Operative bank who allow customers to [choose which charity will benefit](https://www.financedigest.com/how-choosing-a-compliant-broker-benefits-traders.html "How Choosing a Compliant Broker Benefits Traders") from their rewards points. There are a number of benefactors to [choose from Amnesty International](https://www.financedigest.com/choosing-to-challenge-thoughts-on-international-womens-day-2021.html "Choosing to Challenge – Thoughts on International Women’s Day 2021") to the Woodland Trust. Companies are recognising that being responsible is becoming increasingly important and are willing to help their audience do so.

The world of rewards is definitely [growing and we can expect to see more innovation](https://www.financedigest.com/the-edible-oils-market-to-grow-on-an-innovation-revealing-spree.html "The Edible Oils Market To Grow On An Innovation Revealing Spree") from all industries. With [fintechs loyalty schemes offer a great way to gain new users](https://www.financedigest.com/fintechs-how-to-increase-loyalty-through-user-experience-and-fraud-prevention.html "FinTechs: How to increase loyalty through user experience and fraud prevention") and to keep them coming back. Whether it is valuable enough to become its own currency will depend on companies’ abilities to respond to what their [customers want and need](https://www.financedigest.com/why-empathy-needs-to-sit-at-the-heart-of-bbls-and-cbils-customer-service.html "Why empathy needs to sit at the heart of BBLS and CBILS customer service").


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