Buy one get one free (BOGO) is a favorite feature at many grocery stores. The thought of getting something for free brings customers in the door. If a shopper has coupons for the BOGO item, it’s even better.
Who doesn’t like to get something for free, or a reward for being a good customer? Who would turn down a free product or some type of reward or recognition? Well, according to an Inc.com article, “Free Perks Might Actually Embarrass Customers,” preferential treatment, or rewards to customers who haven’t done anything to earn them can be embarrassing, especially when the rewards are given out in public.
A study in the Journal of Consumer Research found that customers like to feel they deserve rewards, and rewards handed out with no explanation actually diminish their value. Giving a free service or a discount after a certain number of purchases or services is a popular customer reward program. For instance, you have 10 oil changes at the local auto service store and the 11th one is free. The customer can feel good about this reward because they’ve earned it.
The study said that if another customer was given a free oil change for no reason, especially when the customer who just completed 10 oil changes and earned the reward was present, the first customer wouldn’t feel she deserved the free oil change and would actually be embarrassed to accept it. It is even more uncomfortable if both customers received their rewards at the same time. Even the customer who just happens to be customer #100, or #1,000 going through the checkout line and gets a free shopping trip around the store did something. They were lucky enough to be at the right place at the right time.
For the study, the researchers set up a booth and gave out free samples to customers. Some were told they were being rewarded because they were loyal customers. Others were just given extra freebies with no explanation. Just telling customers they were loyal made them feel they deserved the freebies. Not so the others. In fact, there was some resentment for the free gifts.
What happened in this study happens in workplace settings as well. Employees who receive a promotion or a raise following a good performance review feel good about their accomplishments. Those who just get a cost of living raise without any effort may not consider it as valuable as someone who has earned it.
Giving every employee a reward for reaching a goal or doing their jobs can actually backfire. Do a good job, we give you a Gift Card, or a turkey, or a day off. That’s a great gesture, but what happens the next time? If the goal reached was more difficult than the last one, employees expect a bigger and better reward. Where does it stop?
Delivering great products and services, and giving customers the attention and follow-up customer service they deserve is appreciated more than a free sample or a 10% off coupon. Appreciating and valuing employees every day can mean more than a free turkey at Thanksgiving. Matching rewards to actions can make all the difference in happy customers and employees.
Photo Source: Freedigitalphotos.net
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