Understanding consumer psychology is key to building a relationship with your audience, because it offers insight into their behaviour. This guide will simplify some psychological points to share insight into why reward systems are so effective. By putting a plan for your own business in place, you could benefit from continued loyalty and a more valued experience for your audiences.

Covering reward system psychology, this guide includes:

  • Importance of rewards
  • Rewards you could offer
  • Choosing the right rewards
  • Commitment and relationship

Importance of rewards

Your actions as a human being are driven by your needs (food, sleep, survival) and rewards. According to BrainFacts.org, anything that motivates, teaches or causes a pleasurable feeling is rewarding. They can be events, objects or activities. 

This is such a priority driving your actions because of your brain’s ‘reward system’. When you expect to receive a reward, dopamine is released. As a result of this, you experience feelings of pleasure. It is also linked with the chemical in the brain responsible for happy feelings, serotonin. 

Ultimately, human psychology means that you and your customers are wired to seek out rewards. So this is why businesses often look to try and incorporate a rewarding experience that they can use to make sure their customers view them positively. When you engage with a brand, your brain responds with good feelings then you are likely to associate them together.

Rewards you could offer

You have to choose the right loyalty scheme to make it valued and rewarding for your customers. There are many options you have to use, and some may work differently depending on the nature of your business.


The most common offering you can provide your customers is a points-based system. It is simple and works on the idea that spending more gets you more. So, for example, for every £1 spent, you get 1 point which can be redeemed for coupons later.


Another offer you could use is a tiered system, which has different loyalty rewards. You would encourage customers to move up the tiers by staying loyal to the business. For example, each tier can give customers a greater level of store discount. 

Paid club-based

Some businesses offer a chance to benefit from exclusive rewards by paying membership fees to be a part of a club. Brands may send members invites to events that they put on. The rewards are only available to those within the programme and they should provide value for the paying customers.


Another offering used by businesses is a value-based system. Brands can pick charitable causes that might interest their audience and encourage action to help them. For example, for every £10 spent on pet food, £1 could be donated to an animal rescue organisation.

Choosing the right rewards

To decide which loyalty rewards you should use in your business, you should consider who your customers are and how regularly they visit your store. If your audience is likely to only make small occasional purchases, they might not see the benefits of taking part. With different customer behaviour depending on your business, some may seem to work better than others. 

A paid-based reward system may be favoured for what it provides, even if customers don’t often go to a physical store. It often depends on the ability of the business to motivate people to stick with a particular scheme.

Some loyalty schemes work best for businesses they would regularly attend. For example, a point system in a supermarket may be more effective than in a car dealership. This is because you would routinely buy food and earn points, quickly motivating you to continue to go to the store. Whereas, you are only likely to buy a new car once every few years, so there isn’t much incentive to go back to the same brand for points.

The points in themselves may not be enormously motivating. Still, the brain’s reward centre is activated about the thought of what they can be redeemed for. Often you exchange points for coupons to make purchases. Customers are rewarded with what they can consider as free money as they may often regularly shop anyway.

Commitment and relationship

Once you have customers engaging in loyalty schemes, it makes building a relationship with them much more accessible. One of the biggest reasons is that they would likely need to provide you with some details about them to join a system. So the more customers who do this, the more data you can have on your target audience.

With your information, you can find new insights about how your customers behave and tailor your overall marketing to reach them with more relevant messages. On a more direct level, having contact information means that you can even communicate directly with each customer. 

Many businesses even take this further by offering rewards based on each customer’s buying habits. For example, a supermarket may give you coupons for nappies after seeing the amount of baby food you recently purchased.

To a customer, having the motivation of a rewarding loyalty programme may mean that they choose to engage with one brand instead of another. The more that a customer returns to the business, the more they become familiar with it. Building a relationship with your market takes time. Still, it will mean that you will have a reliable stream of people paying for your product or service.

Reward yourself too by making finance easy with Countingup

To offer your customers benefits, you must be able to cost up the expenses of providing them. For you to keep track of these, you could set up a separate business current account. Managing the budget should be simple and accessible, so using a mobile app with your information and integrated sorting features would be helpful for you.

Counting up is the current business account with built-in accounting software that allows you to manage all your financial data in one place. Its expense categorisation feature can automatically organise your spending on rewards systems. Easy to view, cash flow insights provided by the Countingup app also allow you to decide what incentives you can give customers in the future.

You can also instantly share your bookkeeping with your accountant without worrying about duplication errors, data lags, or inaccuracies. Seamless, simple, and straightforward! 

Start your three-month free trial today. 

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