This website uses cookies that are
required for operations.

You may allow or block some items through cookie settings.
For more details, please check the Cookie Policy

How Rewards Influence the Fandom Business

The American psychologist Skinner became famous for his animal experiments exploring the theory that human behavior is motivated by rewards. Skinner argued that people will always work to elevate themselves in order to receive rewards. It makes no difference whether those rewards are extrinsic, intrinsic, material, psychological, or gained to obtain or protect something.

Perhaps because of these natural human tendencies, more businesses have started providing compensation in the name of rewards. In this article, we will have a look at the business impact of providing rewards to customers.

Rewards make customers more likely to take certain actions. "Liking something" can motivate action in the fandom business, but other efforts are needed to activate these tendencies further. This calls for a scenario where fans are motivated to engage in fan activities, which we may call a reward circuit. That being said, let's find out how to implement a reward program in the fandom business.

One question before we begin, though—why do businesses offer rewards to their customers? Well, rewards carry a whole range of benefits to a business, and we'll have a look at some of them. 

Why do businesses offer rewards to their customers? 
In the gaming industry, small achievements can add up quickly to help players reach big achievements. Whenever a new game is released, players get the huge reward of "Levelling up" from the beginning. This allows new users to get over their anxiety and take on challenges with an assertive attitude. Even small rewards can help games and businesses grow.

Online shopping websites encourage customer engagement through the achievement of tasks or missions. According to the market research institute Macromill Embrain, 79% of consumers decide whether to make a purchase after reading product reviews. Companies will therefore give rewards in the form of points and coupons to customers who write product reviews. The companies gain from this as reviews encourage potential consumers to make a purchase.

Platform companies that have grown into communities distribute profits as rewards to loyal customers as a way to revitalize the community. As the number of loyal participants increases, so does the quantity and quality of services, which attracts new users.

The food and beverage industry uses rewards in an omnichannel* retail strategy that connects online and offline spaces. For example, Starbucks has been connecting its offline services with its online app through the My Starbucks Rewards program. The app records the purchase history whenever a customer buys coffee in-store, and customers can earn online rewards for subsequent orders. In doing so, Starbucks bridges the gap between online and offline and enables seamless in-store redemption of rewards, creating a consistent customer experience.

In the advertising industry, reward video ads are frequently used to showcase the characteristics of a product or service. If a user watches a video ad from beginning to end, they can be rewarded with game items or cash. Encouraged by the single purpose of receiving a reward, reward ads lead potential consumers to learn about the brand.

* Omnichannel: A service that allows consumers to search for and purchase products across a range of channels, including online, offline, and mobile.

The advantages of such reward programs also apply to the fandom business. 

1) It can motivate fans who are new to fandom by offering incremental challenges to enhance their enjoyment of the fan experience. 
2) It can encourage fan engagement through interactive comments and emoticons, as well as fan-curated content. 
3) By granting emblems, badges, and digital rewards to highly engaged fans, it is possible to foster the expansion of the fan community. 
4) It reinforces the notion that there is no distinct boundary between online and offline engagement, as fans can attend in-person events hosted by their favorite brands and receive online rewards.
 5) Lastly, the brand's values can be communicated through rewards by connecting them with the brand's products and services.

In this way, rewards contribute to both encouraging fan interaction and maintaining a record of fan activities. Then, at what point is it optimal to distribute rewards in order to get fans engaged? What are the typical missions and reward categories used to determine distribution?

The timing and types of reward distribution in the fandom business
First, let's have a look at the best timing for awarding rewards. Depending on the brand's preference, rewards can be used as an element that arouse fans' excitement from the beginning or as the outcome at the end of a mission. The former is suitable for attracting new fans, whereas the latter may be more fitting for enhancing engagement among existing fans. 

However, the brand image can suffer if the reward is given out too soon and without proper consideration. That's because fans seek out a brand for its authenticity and values. If you engage in the fandom business, you can choose between strategically placing rewards at the beginning or end of the process.

It is important to set clear parameters for the rewards—whether they are given early or late. Fans will have to participate in a mission or activity task to participate in a reward program. This lets you treat fans fairly by providing different benefits to groups of fans based on how actively they participate in your content. 

Then, what rewards can fans get when they complete the mission? Types of rewards can include leveling up, emblems or badges that indicate level, gifts in the form of points/coupons/discounts, cash rewards for specific actions, NFTs for loyal customers, tangible products, as well as digital assets such as images, videos, voices, and emojis.

Fan engagement is essential in the fandom business
What is the biggest difference between the fandom business and other industries? The nature of the target audience. In the fandom business, customers are fans. As opposed to "customers" who purchase goods and services based on needs, fans are primarily driven by their affinity towards a company or individual brand. 

Therefore, the core purpose and impact of implementing a reward program in the fandom business is to encourage "increased fan engagement." As fans become more involved in the fandom business, their actions move to the next level. 

So, how can you enhance fan engagement? By looking at the characteristics of rewards, we can analyze their influence on the fandom business.

Different types of rewards and how they apply to the fandom business
Each reward has the following characteristics.

Firstly, implementing missions to receive rewards enhances fans' sense of achievement.
Brands can create direct missions to encourage fan activity. It is possible to tailor missions to include things like making a purchase, filling out a survey, becoming a member, paying the initial fee, or even just leaving a comment or emoticon. By increasing fan activity and completing missions, fans can get reach a higher tier. This activates engagement from fans as they are motivated by achieving goals.

Secondly, acquiring rewards through missions creates a long-term habit for fans.
Fandom business is a time-consuming business strategy. Just as it takes a long time for a fandom to form, it takes a long time for rewards to be paid out as fan activity accumulates. However, the effect is addictive enough to form a habit among fans through missions. Rewards boost fan activity.

Thirdly, fans can decorate, share, and brag about their rewards.
Rewards issued by a fandom business include digital rewards in the form of videos/images/audio, point rewards that can be used for purchases, NFTs that provide ownership of content to fans, and emblems/badges that appear for each mission accomplished. All of this can stimulate fans' desire to collect. If you set up a space online where fans can display the results of the rewards they have collected, they can share and boast about their fan activities.

Fourth, rewards get fans more involved in the community and serve as a symbol of unity.
The community deepens the relationship not only between brands and fans but also between the fans themselves. In addition, the data generated from these connections—which owning your own platform gives you access to—can provide you with invaluable hints for developing your reward program strategy. In particular, NFTs are granted as rewards to users who actively engage in community activities. This allows for the digitization of content ownership through the issuance of NFTs to fans. Rather than just being an investment, NFTs have become a way to strengthen communication and unity between brands, consumers, and fans by building communities.
Reward programs increase fan engagement and loyalty by providing incentives with appropriate limits. In addition, showcasing the rewards within the community provides both the tangible and intangible rewards that fans want for their activities.

Reward programs make it easier for companies to manage fan communities while also encouraging organic fan engagement. In addition, fans can be categorized in accordance with their fan activities through the use of distinct reward benefits. When fans are broken down into smaller groups, it's easier to give them individualized benefits. This, in turn, fosters a virtuous circle by enhancing the loyalty of fans. Rewards enable advanced fandom management where fans can also benefit.
Fans can prove their loyalty to the brands they like with records of their fan activities. Collecting rewards is also a means of reminiscing and sharing experiences that creates a feeling of closeness with the brand.
If you are a brand engaging in the fandom business, be sure to find both significant and minor rewards that can make your fans happy. Fans appreciate being rewarded, and it helps the fandom business grow. The higher the fan engagement, the bigger the fandom business.

* Reference:
NFT의 성공에는 커뮤니티가 있다 | 크리에이터스
2022년 리워드(X2E) 앱 18종 분석 | 다이티
[콘.스.프] '좋아요'와 '댓글'은 돈이 됩니다 | 문화편의점
Pat Flynn, 『SUPERFANS』, Get Smart Books
Share this!