Customer Loyalty Programs For Small Business – Just look in my wallet and you’ll find punch cards for all my most visited local businesses – a coffee shop that gives you a plastic farm animal instead of a table number, a ramen restaurant with the tastiest tonkotsu broth, a bookstore with the most diverse selection of chefs (also sandwiched between two delicious pitas).
These small business loyalty programs, like any other loyalty program, are designed to generate repeat business, retain customers, and ultimately build a successful network of brand ambassadors who praise you to their friends, family, and the wider community.
Customer Loyalty Programs For Small Business
In most cases, a loyalty program rewards customers for their repeat business and customer behavior, but it can also include rewards for social media sharing, referrals, and other actions that demonstrate loyalty.
Loyalty Programs For Small Businesses
Of course, there are some costs associated with repeat customer loyalty programs, including the time and energy it takes to set one up, as well as the rewards themselves. But with a little smart math and due diligence, you can get a loyalty program up and running with minimal costs and a high return on investment through customer retention.
There are different types of loyalty programs for existing customers, each with their own advantages and disadvantages. When deciding which one is best for your small business, keep in mind that it needs to work for you and your customers.
In other words, your staff and POS system must be able to support it well and it must be accessible enough for your customers to use it.
The punch card method is by far the easiest to implement for new and loyal customers because it requires nothing more than a stack of loyalty cards and punching holes.
Ways To Gain Customers (and Keep Them)
Rewards for these types of customer satisfaction loyalty programs typically include a free item after X purchases (e.g., free coffee after 10 coffee purchases) or $X off after X purchases (e.g., $20 off your next purchase after 10 purchases of $20 or more). :
There are several drawbacks to this type of loyalty program. Firstly, the customer must physically have his card with him. Second, cards are easy to lose, throw away, or simply forget. Finally, this method does not require the customer to provide their email address or phone number, which means you cannot reach them with promotional materials.
Like punch cards, these are physical (usually plastic) cards that customers carry in their wallets to earn rewards over time.
Using these cards requires your POS system to sync with the rewards platform your business uses, often used by supermarkets or other larger retailers (such as Sephora).
Build Your Own Loyalty Program
Pro Tip: Some membership cards give customers that sense of exclusivity, like the tiered Beauty Insider cards. Use them to collect points that you can redeem for free products and get a free birthday present.
Similar to a punch card, this program requires the customer to carry a physical card, but depending on the technology you have, your employees can also just ask for a phone number or email address to open their account, which it makes it easier for your customers.
These types of loyalty programs are often based on accumulating points. When you reach a certain number of points, you will get a certain amount of your next purchase. In some cases, you can redeem points to get items “for free”.
It solves the problem of carrying a physical card – however, people may be hesitant to reveal their personal information to join. One way around this is to offer a discount or points for signing up for their current purchase.
Reasons To Create Rewards Programs For Small Business
Some companies will do a combination of in-store and online withdrawal, as Body Energy Club did, since they sell products both online and offline:
Requests to join a loyalty program are usually seen during checkout, when you are prompted to sign in or “Create an account to earn rewards.”
Grocery delivery service Spud keeps customers loyal with the points program, which allows customers to earn points with every online order.
If you are a B2B (business to business) or wholesale company, your loyalty program may look slightly different than described above. After all, your customers are likely to interact with your sales team over the phone or email, and they’re likely to make larger purchases than their morning coffee.
From Customer Loyalty Programs To Strategic Partnerships: Smart Ways To Grow Your Small Business
B2B loyalty programs offer greater opportunities for customer referrals, upsells/cross-sells, and brand awareness. For this reason, rewards are usually bigger and have more impact on the customer, for example in the form of monetary rewards.
Software company Unbounce recently launched its version of a loyalty program, which rewards customers who refer other customers with 20% cashback on a new customer’s recurring revenue:
Alternatively, you can invite customers to join an exclusive group of elite customers – again, as Unbounce did with its Expert program:
If your current customers are happy with your offerings and you’re doing well financially, a loyalty program is the perfect way to turn your customers into evangelists while also attracting new customers.
Essential Tips For Boosting Customer Loyalty In Your Small Business
Not sure where to start to attract loyal members? Here’s a three-step process for getting your small business loyalty program off the ground.
The first thing you’ll want to do when creating a loyalty program is choose a platform to run your program on. As a small business owner, you probably can’t justify the cost of a custom platform. The good news is that there are many popular apps you can try, including:
Pro Tip: To understand what your customers (and prospective customers) want (or don’t want) from a loyalty program, consider sending your customers and conducting a survey.
A customer relationship management (CRM) tool can help you do this at scale by filtering your contacts by type (prospect or customer) and, if connected to an email provider, can also send mass emails to any segment send.
Gift Cards & Loyalty Programs
Here’s what it looks like to send one of these emails in , which is designed for Gmail. Note the blue and green boxes – they’re dynamic and automatically extract your customers’ names, meaning you can send a mass email…but still make it look personal to each person:
Next, you need to define how customers earn rewards and what those rewards will consist of. Again, if you don’t have an understanding of what your customers want, don’t guess – ask them!
Pro Tip: Have you ever heard of MVPing? It stands for a minimum viable product, i.e. a prototype that works in the shortest possible time with the least effort. When it comes to making a loyalty program that works, it can take time to get it right, so don’t hesitate to launch with an MVP and then make improvements based on the results and feedback you get.
So you’ve got tons of customer insights, you’ve built your MVP loyalty program, and you’re ready to go live…now what?
Customer Loyalty Program Best Practices
Before you release this thing into the wild, plan your promotion strategy. Because if no one knows about your loyalty program, they definitely won’t use it and you’re wasting precious time and resources creating it.
Below are some key ways you can promote your small business loyalty program to loyal customers:
Launching your customer engagement loyalty program is a huge milestone, but you need to closely monitor customer data, customer behavior and progress to determine whether or not it has been successful.
Ideally, you set goals for your loyalty program so you can track its performance. Let’s say you want to sign up 10% of your customer base in the first three months. To determine whether this was a successful customer loyalty program, use the following opt-in rate formula:
Loyalty Card Template Editable Small Business Card Template
According to the Smile.io rewards program software, the average loyalty program has a 23% participation rate, so your goal should be to meet (and even exceed) this percentage within a reasonable timeframe.
Another customer metric to track for brand loyalty is the conversion rate, which can be calculated as follows:
Again, Smile.io reported that “66% of rewards issued by brands were redeemed by their customers,” so this should be a good number for providing a positive customer experience.
By rewarding your best customers with meaningful rewards to build brand loyalty, they will in turn reward you with loyalty, referrals and other actions that represent real value to you, such as social engagement, reviews and ambassadorship.
Tips For Starting A Small Business Loyalty Program
If you’re a small business owner wondering if a repeat customer loyalty program is a good fit for your business, don’t speculate. Your customers will be the biggest indicator of success, so pick their brains, understand their motivations and quickly launch something for customer satisfaction.
Send customers automated and handwritten personalized thank you emails and notes with this step-by-step guide to thanking customers for their business.
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