Discounts are dead. Rewards speak louder than cashbacks

For years, discounts were seen as the fastest route to consumer attention. But the truth is, they’ve long outlived their usefulness.

The modern digital-first customer is sharp, self-aware, and always connected. They are no longer seduced by a scratch card or a QR code that promises an INR 10 cashback. These are relics of a transactional past.

I’ve seen this shift unfold from the frontlines of consumer engagement. A 25-year-old buyer didn’t care for the cashback coupon tucked in his cereal box. But when he received a free Cult.fit pass inside, he posted it to his social media.

So, when brands replace discounts with contextual, lifestyle-aligned rewards, redemption rates soar, campaign memories linger, and, most importantly, loyalty deepen.

Why rewards trumps rupees

The notion that rewards outperform rupee-led promotions isn’t theoretical. It’s a behavioural, economic, and brand-building truth we’ve validated across scale.

Let’s begin with the behavioural layer. Discounts appeal to price sensitivity—a functional, often momentary driver.

Rewards, by contrast, taps into identity. It speaks how consumers see themselves and the role a brand plays in that vision. This shift from rational utility to emotional congruence creates stickiness, not just spending.

Economically, discounting is deflationary. It compresses margins, devalues innovation, and disincentivises loyalty. Rewards, however, do the opposite.

When a consumer receives a benefit that mirrors their aspirations, it elevates the perceived value of the brand. The price remains, but the product becomes more than what’s in the box.

From a brand equity standpoint, rewards act as an amplifier. It strengthens memory structures. It creates story-worthy moments. And critically, it prompts active engagement; a departure from the passive, one-way exchange that defines discounting. A consumer who redeems a hyper-personalised reward gives back data, attention, and often, advocacy.

Finally, it isn’t just a differentiator in saturated categories, it’s a strategic enabler. In commodities where the functional delta is narrow, rewards that align with a consumer’s lifestyle serve as brand narrative extensions. They carry tone, positioning, and intent in ways discounts never can.

How rewards help consumers across industries

Globally, nearly 80% of consumers now say they prefer brands that personalise offers and benefits. Consumers want brands that ‘get’ them, speak to their lifestyle, and reward their attention with something meaningful. This will signal: “You understand me.”

A relevant reward delivers utility that is enduring, not transactional. It’s not about saving money; it’s about enriching life. And in a world of cluttered touchpoints, consumers respond most to brands that offer meaning, not just mechanics.

For brands, the shift to relevance-first engagement is not just smart; it’s existential. Legacy consumer acquisition models are no longer sustainable.

What’s left is engagement architecture; and this is where relevance-based rewards deliver the goods. They protect margin while creating delight. They generate first-party data in a regulatory environment where third-party cookies are disappearing. They build loyalty systems, where frequency is incentivised through progressive engagement rather than repetitive price cuts.

A brand’s success therefore, hinges on frequency, not just reach. Relevant reward frameworks can be structured to incentivise multiple purchases, category crossovers, or digital participation, using gamified triggers and progressive benefits. This builds a habit.

It also provides a long-overdue answer to the data drought. When consumers voluntarily engage through a personalised reward experience, they’re more likely to share preferences, regions, language options, and behavioural signals. Especially for brands, who’ve historically had little visibility into the end user, now gain valuable insight without dependence on retailers or aggregators.

And finally, relevant engagement unlocks agility. With the right platform partner, brands can deploy reward ecosystems that adapt by geography, season, language, or trend without adding operational complexity. This modularity allows them to scale personalise across a vast and diverse consumer base, while maintaining consistency in brand tone.

What brands must do

The numbers are no longer soft signals. Rewards localised by language, region, or lifestyle deliver 60% higher engagement than undifferentiated schemes.

What should brands do?

First, they must shift from campaign thinking to system thinking. This means building long-term, modular reward architectures that adapt to consumer segment, geography, and behavioural signal. Not five campaigns a year but one intelligent system that evolves in real time.

Second, brands must reorient their internal metrics. Redemption is no longer the goal. Engagement duration, opt-in rate, data richness, and behavioural triggers are the new performance levers. Loyalty must be measured in depth, not just breadth.

Third, they must choose partners not just for fulfillment, but for platform intelligence. Running a reward campaign is not difficult. Running one that learns, scales, localises, and retains? That requires infrastructure, experience, and behavioural design, three pillars we’ve spent over a decade refining.

The new language of loyalty

The era of flat discounts is closing. In its place rises a more intelligent, emotionally resonant form of value delivery: rewards.

This isn’t about gimmicks or one-time perks. It’s about building an ecosystem that reflects a consumer’s lifestyle, respects their attention, and deepens their trust. When done right, relevance doesn’t just drive sales, it transforms how a consumer sees your brand.

In competitive categories, that shift is everything.

- Vikas Shah, co-founder, BigCity Promotions