How the concept of Earn and Burn has evolved over the years
With disposable income on the rise, especially amongst the youth and digital-first audience, the concept of Earn and Burn has become popular because of its time-bound results, writes Dhruv Verma, Founder and CEO of Thriwe.
The concept of Earn and Burn has become an important component in the current landscape of loyalty and reward points businesses. The term ‘Earn and Burn’ commonly means to earn reward points on making maximum spending and burn them with quick redemption. With the advent of UPI and cashless transactions, and with the increase in usage of digital currency, loyalty programs too have seen a massive evolution. With such shifts in consumer behaviors, technological advancements, and a younger set of digital-first audiences, the idea of Earn and Burn has transformed significantly.
The loyalty and reward points businesses has seen a shift from a transactional model to an experiential model. Earlier, point-based transactions were the focus of loyalty programs. Users could unlock rewards on the basis of usage and purchases. They were given loyalty member badges on unlocking a series of transactions or reaching a specific milestone. With time, this model has moved to providing a seamless experience, instead. Customers today want an overall smooth experience versus just rewards and points. Ease of access, quick turnaround, customized offers, etc. are now playing a crucial role in the ecosystem.
We have now moved to an ecosystem where personalization and customization have become valuable. With disposable income on the rise, especially amongst the youth and digital-first audience, the concept of Earn and Burn has become popular because of its time-bound results. "Earn and Burn" emphasizes the significance of meeting deadlines in today's environment, particularly for audiences who are accustomed to using digital media.
The new and evolved model
Today, tiered systems are used frequently in modern loyalty programs. This kind of program offers a new and different level of rewards as per usage and spending. Advanced benefits are unlocked and privileges offered increase, when customers achieve upper levels as a result of higher spends or usage. This allows customers to get a sense of recognition and reward according to their unique inclinations and degrees of engagement. With the ease of data availability today, platforms can easily utilize data-driven insights to offer individualized rewards based on the tastes and behaviour of each individual client. This degree of personalization builds brand loyalty and improves client happiness.
Brand advocacy too plays a considerable role in the Earn and Burn ecosystem. With the integration of social media platforms, members are able to interact, exchange stories, and strengthen brand advocacy throughout their networks easily. Customers can earn referral points and rewards by posting referrals on social media platforms, which would increase the chances of the brand retaining such customer, and also attracting new customers. Social media platforms have a large and engaged user base, which helps in such sharing and conversion.
Additionally, modern loyalty programs have begun using gamification components to increase client engagement beyond simple transactions. This not only offers an interactive experience to the users but also improves brand-customer connection by generating excitement and promoting continued engagement. As blockchain technology develops, tokenized reward systems are also becoming more and more popular. There has improved interoperability, transparency, security, and flexibility. Tokenized incentive systems are estimated to become increasingly important in augmenting client engagement and loyalty in a variety of digital environments.
As per Future Market Insights’ recent reports, the Indian loyalty program market is projected to reach US$ 14,502.6 Million by 2033, at a CAGR of ~15.7% from 2023 to 2033. This shows the potential of the Indian market to for evolve and grow with increase in consumption patterns. With the increased involvement of technology, reward and loyalty programs have become an opportunity for brands and e-commerce platforms to build customer retention. By leveraging innovations and new-age technology, the concept of Earn and Burn is can help strengthen brand loyalty and add value for both customers and stakeholders alike.
The author of the article is Dhruv Verma, Founder and CEO of Thriwe. Views expressed are personal.
