The idea of a customer reward program is to first get customers interested in your product. That is often achieved by introductory incentives. These incentives might be the lure of free car wash to the first fifty people to pump gas at the new gas station at the corner of East and Vine St. Or it could be a credit card promoting not to charge interest on the new card for the first three months of activation. A publishing company may promise a huge raffle with the names of all first time subscribers. The incentive offered to real the customer in depends on the company, the type of product they are promoting, and the type of customer they are expecting to attract.
Once they have the client introduced to the product they have to come up with a way to get that client's pertinent information entered into their computers data base. A credit card company will not have to worry about that, the information would have already been entered when the customer applied for the credit card. But many businesses do not have that luxury they have to think of a way to get the customer into their database and convince their customers that it's a good idea for their name to be there. The company also has to bear in mine that a customer's name typed into their data banks is not going to do them a lot of good if the customer comes back, preferably that they come back lots of times.
This part of the process normally requires a series of rewards or bribes. These rewards are things given to loyal customers. Some times the rewards are handed out based on how many times a customer has visited a store. Other times rewards are handed out based on the total doller amount a customer has spent at a business.
Most businesses offer customer rewards based on a point system. Each time a customer buys a definite doller amount of merchandise a point is rewarded to their account. When they have accumulated a pre-determined amount of points the company gives them a reward.
Credit card companies often use a point system when with their frequent flyer mile plans. Every time a customer uses their credit card for a purchase points are added to the customers account, these points are put in queue. When a customer has built up enough points they can use them to redeem a free airfare ticket.
Not to long ago customers had to take the companies words on the amount of points the customer had accumulated towards approaching a customer reward. Now that so many businesses have websites that is changes. Most business give the customer a user id and a password and the customer can access their account and watch the customer reward points accumulate. This interactive reward point accounting makes customers feel like they have some control over the account.
Several businesses now put expiration dates on the points. If a customer does not redeem their points in a set period of time they loose them. Companies do this to encourage customers to come back as frequently.