Yes! Even a Small Business Can Have a Loyalty Program
By Andrew Patricio
June 18, 2018
Small Business & Entrepreneurship
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We’ve all heard that it takes way more money to get a customer than keep a customer. Many startups focus on customer acquisition. However, once you start getting customers, you need to spend equal time on how you’ll keep them.
Building a customer loyalty program is a long-proven way to reduce the churn of customers yet many small businesses think a loyalty program is time-consuming and expensive. With today’s technology, it doesn’t have to be. And considering how much you spend on customer acquisition, perhaps it’s time to invest in getting previous customers to purchase from you again. So let’s look at how a small business can start the process of setting up a loyalty program that will improve your return on marketing.
Who is Your Customer?
Like all marketing initiatives, setting up a loyalty program starts with your customers. What do they respond to? How often do they purchase products or services you sell? What other products or services do they use? Taking the time to identify your customer’s behavior will help you figure out what type of loyalty program to start.
Choosing the Best Type of Program
There are several different types of loyalty programs and not all of them make sense for every business. Buy 10 Get 1 Free doesn’t really make sense for a car dealership selling to families. And while a punch card is good for a nail salon, partner rewards is likely better if that salon is in a space rented out by other beauty professionals.
Below are three of the most common loyalty programs to consider and where they make sense.
These are just a few ideas to get you started thinking about what type of program your customers will respond to and get you thinking how digital tools can help you make it reality.
Building a customer loyalty program is a long-proven way to reduce the churn of customers yet many small businesses think a loyalty program is time-consuming and expensive. With today’s technology, it doesn’t have to be. And considering how much you spend on customer acquisition, perhaps it’s time to invest in getting previous customers to purchase from you again. So let’s look at how a small business can start the process of setting up a loyalty program that will improve your return on marketing.
Who is Your Customer?
Like all marketing initiatives, setting up a loyalty program starts with your customers. What do they respond to? How often do they purchase products or services you sell? What other products or services do they use? Taking the time to identify your customer’s behavior will help you figure out what type of loyalty program to start.
Choosing the Best Type of Program
There are several different types of loyalty programs and not all of them make sense for every business. Buy 10 Get 1 Free doesn’t really make sense for a car dealership selling to families. And while a punch card is good for a nail salon, partner rewards is likely better if that salon is in a space rented out by other beauty professionals.
Below are three of the most common loyalty programs to consider and where they make sense.
- Buy X, Get X Free – this type of loyalty program is like those punch cards from coffee shops in the 90’s. Nowadays, though, you can skip the multiple punch cards that inevitably get lost defeating the entire purpose of the program, and go digital. Spring Rewards, for example, ties the rewards to your customer’s credit and debit cards, so they don’t have to download an app or keep a punch card in their wallet for months.
- Points For Purchase – this type of loyalty program is like what you see at REI and Ulta; for every dollar your customer spends, they get points. Get enough points and your customers get some sort of cash or gift.
- Partner Rewards – this program is used for both loyalty and acquisition. Plenti is a good example of partner rewards. This is more complicated as it requires you to partner with other businesses that offer complementing services to your customers. For a group of small business owners, a service like Belly could be an easy way to coordinate since it’s one of the most popular loyalty providers on the market, integrating with tablet POS with mobile apps and a plethora of digital marketing capabilities.
These are just a few ideas to get you started thinking about what type of program your customers will respond to and get you thinking how digital tools can help you make it reality.