Rather then focusing on how to reward the player per game, focus on the turn-based battles themselves. In reality, there is no real way to reward the player if you're going to have consecutive turn-based battles. Sure, adding a hero that levels up might be a nice idea but as it is the only constant, the attachment to the hero would become stronger then the wish to play the game itself; having perma-death on him would actually discourage players to play the game.
To get back to my original point, focus on the turn-based gameplay itself. Turn it into something next gen, where anything seen on the battlefield can be used to your advantage; or disadvantage. Say your orc has spiked armor, any melee fighters attacking him would have damage inflicted upon them as well etc. You threw a poison gas bomb at the enemy, but the wind direction drifted it towards your line instead and severely injured some of your minions.
Don't stop there, you have an elf and an orc fighting together but you didn't know that in their history there was a huge battle that put their two races as enemy's and so they turn on each other in the middle of an attack, wreaking havoc and chaos that allowed the enemy to overcome your superior forces. You started to travel across a bridge, but an assassin had planted a bomb that would blow up when stepped on. Your forces get thirsty and take a drink from a river, but it turns out that their were enemy mermaids waiting in ambush; taking out half your forces before retreating into the distance with their superior speed in the water.
Okay, that's enough examples. But just think, a game where your strategy's can become a reality. You don't have to think about balancing it with story's or anything, just create the most versatile turn-based strategy game. Well, that's my opinion.
