Benefits of Client Funded Rewards | Hydrogen Blog
Benefits of Client Funded Rewards

Benefits of Client Funded Rewards

In a crowded market, businesses are always looking for new ways to gain and maintain customers. While standard loyalty cards are a traditional method for maintaining loyal customers, businesses are increasingly turning to more personalized and blended options for loyalty programs, such as client-funded rewards. 

But how do client-funded reward programs work exactly, and what are their specific benefits in comparison to other reward programs? 

What are client-funded rewards? 

Client-funded rewards allow businesses to give something back to their loyal customers while convincing these customers to continue coming back to their brand. Rewards could include any branded form of benefit, such as earning gift cards after certain purchases, or receiving discounts after a certain amount of spending on a branded debit card.

The rewards are client-funded because they are provided and paid for by the business (i.e. customers receive discounts directly from the business that offers the rewards).

Reward programs can include a variety of features and even be specific to each business or customer. This allows a personalized set of rewards that can keep customers coming back based on their own preferences and spending habits.

Client-funded rewards are mutually beneficial, allowing customers to receive benefits for their loyalty to a brand, and allowing businesses to maintain a loyal customer base.

Why should your organization use client-funded rewards? 

Client-funded rewards include a variety of benefits that go well beyond just convincing customers to stay loyal to your brand. Some benefits include:

Customer loyalty: By introducing client-funded rewards, you can boost future loyalty to your brand and encourage consumers to continue coming back. If you offer a certain reward for customers spending a certain amount or opening a certain subscription, customers will feel good about supporting your brand and will be more likely to return in the future. According to Nielsen, 84% of customers say that they’re more likely to stick with a particular brand if it offers them loyalty rewards.

Outcompete your competitors: If customers feel loyal to your brand over others, your brand will of course be better adapted to outcompeting other rival businesses. You could get customers coming back to you every time they need to make a purchase, even if using competing businesses would be more convenient for them. 

Better understand your customers: By setting up a tracked system of client-funded rewards, you can build up a better idea of your customers’ spending and purchase habits. Through a vast set of data linked to the individual rewards account of each customer, you can create better marketing campaigns or promotions, while working out which demographics to specifically target with specific products or services.

Remain relevant: Offering a loyalty program can help businesses and brands remain relevant in the minds and lives of consumers. If a consumer owns a rewards card with your company’s branding, or receives spending reports from your business, they will be reminded of your brand consistently throughout their day or week.

Examples of companies using client-funded rewards 

Amazon: Amazon’s Prime membership is perhaps the best-known example of client-funded rewards. For a flat monthly fee, Prime users can gain access to free one-day delivery on a variety of products, as well as its streaming service. They also get access to special deals on Prime Day, giving them extra discounts for their continued loyalty subscription. 

Revolut: Revolut offers a referral program that allows current customers to receive significant cash rewards. Card-owners who successfully refer friends, where these friends open a bank account with Revolut, can receive up to $45. Research suggests that Revolut’s referral program has resulted in a 700% increase in customer acquisitions between 2018 and 2019.

Starbucks: Starbucks is one of the most simple but successful reward programs. With every drink a customer buys, they earn stars, which can be put towards free drinks and food, merchandise, and even birthday gifts. 

Uber: With every ride you take on Uber, you earn reward points. The more points you earn, the higher your membership level, unlocking a series of rewards and benefits over time. Rewards can include cash, priority pickup, and flexible cancellation. The program is designed to reward consistent customers based on their usage, awarding them with greater flexibility and control in return. 

How to build your own client-funded rewards with Hydrogen

With Hydrogen, you can create a personalized client-funded rewards program specifically for your business. The creation and management of this rewards program is included in Hydrogen’s no-code portal, meaning you can leave all the complex code up to us, while still receiving a customized and need-specific rewards program.

You can create your own specific loyalty offers on a programmed basis, or ad-hoc (for example, in line with specific marketing campaigns). And, you can pay out rewards for bonuses, referrals, and more from your own reserve balance.

The features you can gain access to when building your client-funded rewards with Hydrogen include:

Sign-up bonuses: Your customers can receive bonuses in the form of cash, discounts, or products when they sign-up for a new feature or mailing list.

Spending bonuses: Customers can receive bonuses in the form of cash, discounts, or products when they spend a certain amount, either in one specific transaction or over many different transactions.

Merchant Category Codes (MCC): MCC helps customers receive awards with the input of specific customer codes (e.g. 5% off with EAT5).

Merchant name bonuses: Financial bonuses with other named third-party businesses (e.g. 5% cash back on purchases at Starbucks).

Merchant ID bonuses: Merchant ID allows you to restrict rewards to businesses that you are partnered with (e.g. 5% cash back on purchases at your restaurant with a specific partnered business).

Referrals: Customers can receive financial or product bonuses when they successfully refer friends to your business. 

Discounts: Customers can receive specific discounts over a certain period of time (e.g. 10% off on garden purchases during summer).

Are you looking to create a client-funded rewards program for your own business? Contact us today to learn more.


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