How to build a customer loyalty program

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12/06/2018

Today everyone tends to expect more than just great service and quality products – they want perks as well. Airline’s lead the way with their loyalty rewards and air mile schemes. Fortunately, these tactics aren’t the exclusive domain of large companies – there are many affordable and easy-to-implement options available to small businesses.

Unlike promotions that anyone can enjoy, loyalty programmes are on-going campaigns designed to keep your best customers engaged and bound to your business instead of your competitor.

Creating a successful loyalty program

Designing an effective program requires work, research and continued engagement beyond what you find in standard promotions.

Some of the easiest to implement are:

• A one-time discount, or ‘buy one and get one free’ that’s offered to every customer. Be aware it may not bring repeat business as it will not succeed in making your best customers feel special (as everyone gets the same deal).
• Point cards (get your tenth coffee free) are a proven way to increase customer engagement and improve brand loyalty. Some studies claim that up to 69% of customers buy more products or services when enrolled in a loyalty program. Implement a loyalty program and you should hopefully see a rise in visit frequency, customer spending and satisfaction.
• Running events to profile new products ahead of everyone else.
• Holding educational conferences or webinars to clients to give them an edge in the market.
• Having ‘early bird’ specials which are only promoted to existing customers.

All of these examples are easy to do (as long as you have a database of customers). However you’re best to select and reward your most valued customers. The ones that spend the most, should be the ones to reward. To do this you’ll need Point Of Sale or accounting software that tracks customer purchases, so you can identify how much a customer spends and when.

Sophisticated points systems

Smaller businesses can now use third-party loyalty cards instead of developing their own. This allows you to have a personalised loyalty card without huge expense. All of these companies should allow you to:

• Create a scheme that’s unique to your business.
• Be able to track customer purchases and set reward levels.
• Simple sign up and the use of cards or online to collect and redeem.
• Support for any queries you may have.

Using your small business advantage

Unlike larger companies, as a small business you might actually know the names of your customers. To make individual customers feel special, you should personalise the experience as much as possible without being intrusive.

If a customer has a particular product need, make a note and send them reminders when they’re available. If a product is rare or only available in limited quantities – perhaps a hard-to-find vintage wine or seasonal product – you can offer to place a quantity on hold for them or make a special order. If you’re a service based business, prioritise their work over others that don’t mind (or know) to wait.

Share the good news

Spread word of your rewards programme through your various communication channels – email, social media, newsletters, employees and more. Encourage customers to try your new programme by gifting them some starter points or purchase credits (a free stamp on the coffee loyalty card for example), or by offering an additional percentage discount from their next purchase when they start using the programme.

Summary

Your customer rewards programme should bring you plenty of rewards too. Through your programme, you’re building customer loyalty and adding value to your brand identity. If you’ve structured your programme well, it should also put you in a good position to take advantage of customer data, which may include demographic information related to purchasing habits. This kind of low-cost market research data also gives you an opportunity to better tailor your business practices to your ideal customers.