The Psychology Behind Rewards
Anticipation Triggers Dopamine
Humans are wired to crave rewards. Studies show that the brain releases dopamine not just when we receive a reward, but when we anticipate one.
That anticipation fuels motivation and repeat behavior. Every time your customer knows they’re earning points or moving closer to a reward, their brain registers that as a win.
The Endowment Effect Builds Loyalty
Once we feel like we “own” something, even if it's just progress toward a goal, we’re more likely to value it. This is called the Endowment Effect.
Incentive programs that let users start earning points right away or give them a head start tap into this phenomenon, making participants more invested from day one.
Progress Feels Good
Whether it’s closing a ring on your smartwatch or seeing a loyalty progress bar hit 75%, the psychology of progress is powerful. People are more likely to repeat behaviours when they can see measurable results.
Tangible Rewards Outperform Cash
While many assume cash is the most effective motivator, studies consistently show that tangible non cash rewards (like branded e-gift cards) actually drive greater engagement and performance.
Professors Scott A. Jeffrey and Gordon K. Adomdza studied 441 call center employees and found:
“People think more frequently about non cash tangible incentives (retail items and travel) than cash incentives, and as the frequency of thought increases, performance increases.”
This “mental availability” led to a larger performance boost for tangible rewards even when they held equal monetary value to cash.
Incentives = Smart Business
Retention > Acquisition
It costs 5x more to acquire a new customer than to retain an existing one. Incentives help keep your buyers engaged and coming back, especially in competitive industries where switching suppliers is easy.
Real-World Results: Rewards Win
At a large automotive retailer, sales teams were offered either $75–$250 in cash or rewards of equivalent value for each car sold.
- The cash group sold 2% over quota
- The rewards group sold 16% over quota
That’s a dramatic performance gap and further proof that well-chosen tangible rewards outperform cash incentives when it comes to motivating behavior.
Specificity Drives Motivation
When rewards are hypothetical, people usually choose cash. But when a specific non cash reward is offered - like a Cruise, Airline or Live Sports Event e-Gift card, people work harder to earn it.
Psychologists Victoria A. Shaffer and Hal R. Arkes found:
“As soon as a non cash reward was no longer hypothetical, and a specific reward was presented, participants worked harder for it.”
Channel Perks in Action
Channel Perks is a modern rewards program built for brands that rely on distributors, resellers, and channel partners. It helps you incentivize repeat purchases in a way that’s easy to manage and deeply motivating for your partners.
Here’s how it works:
- Partners sign up for the program in a few simple steps
- They earn points based on their purchases
- Points are redeemed for e-gift cards from a curated catalog -delivered the same day
Some popular reward categories:
- Electronics – Think Best Buy, Apple and Google
- Travel – Major Airlines, Hotels and Cruise options
- Experiences – Spa weekends, adventure travel, or team-building retreats
- Dining – From fine dining, steakhouses to popular chains in your neighbourhood
- Live Events – Tickets to live sports, concerts and the theatre
Because rewards are meaningful, specific, and visually appealing, your partners are more likely to remember them and come back for more.
Final Thoughts
People don’t just want to be sold to. They want to feel seen, valued, and rewarded.
When you understand the psychology behind motivation and apply it with the right tools, you create deeper connections and long-term loyalty that goes far beyond price or product specs.
That’s what Channel Perks is all about: using proven behavioral science to help you grow through loyalty.
Ready to see how Channel Perks can help drive repeat business in your channel?
Book a demo or reach out to our team today.
