Researchers have found that extraordinary (novel and arousing) rewards lead to customer self‐expansion.
Loyalty reward programs are among the most common marketing devices used across various sectors to encourage repurchase and enhance retention by increasing customer switching costs. Loyalty programs can function as a relational lever; for this reason, brands strive to build long‐term relationships with their consumers through their loyalty program strategy.
The authors confirmed that the types of rewards that lead to emotional commitment and create the most valuable consumer in terms of relational worth are memorable or meaningful rewards instead of mundane or common ones. Special rewards are rewards that are unusual, rare, and extreme and have distinguishing features of novelty and emotion. The researchers emphasized that preferential treatment could positively impact satisfaction, commitment, purchases, word of mouth, and customer share.
The research argues that special rewards will enhance customers' self‐expansion as consumers are likely to feel more favorable about a brand if the brand allows them to do something unique and exciting. Therefore, when consumers receive extraordinary rewards, they may rapidly self-expand.
The results showed through self‐expansion theory testing in the brand context that self‐expansion can occur not only within an interpersonal relationship or with fictional personalities but also with a brand. The study reveals that if a brand can provide novel and arousing incentives, the clients will tend to recognize the brand as one that improves their skills, expertise, and experiences. It was stated that meaningful rewards strengthen brand identification, customer satisfaction, and intention to recommend and evaluate the brand positively and to identify with it.
The study published in the prestigious scientific journal Psychology & Marketing gives two great recommendations for managers and marketing strategies in designing their loyalty programs. First, when building and managing loyalty programs, it is essential to take into account the extraordinary level of rewards by directing efforts toward allowing consumers to develop new skills and knowledge. Second, suppose the goal is to strengthen brand identification and establish a more meaningful and self‐connected relationship with customers. This can be accomplished, through courses, conferences, training programs, workshops, and outings, through access to an expanded social network, or through special activities that represent the brand's values.
The research concluded that the rewards and all the extra activities are strategic tools to build the consumer-brand relationship and not only to compensate loyal consumers in the short run.
Original Study:
Gorlier, T., Michel, G., 2020. How special rewards in loyalty programs enrich consumer-brand relationships: The role of self‐expansion. Psychology & Marketing 37, 588–603. https://doi.org/10.1002/mar.21328