Ideas for Creating a Customer Loyalty Program
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Small businesses should not get scared that implementing a customer loyalty program could be too expensive. If it costs five times as much to find a new customer when you lose an old one, then reward programs are indeed worth every penny spent. So how do you go about having one? Here are a few examples:
Membership programs provides special incentives. (Costco)
Rewards programs gives you gifts, perks, or cash back depending on how many points you have “earned” by the amount of business you do.
Community programs offer charity sponsorships, demonstrations, and emergency charity drives.
Ideas for Creating a Customer Loyalty Program
Customers are the bread and butter of any small business, and winning peoples long-term loyalty can really pay off for you and your business.
It is well documented that the majority of a firms sales come from a small proportion of repeat customers. Experts also estimate it costs between two and 10 times more to win a new customer than to retain an existing one. Targeting these loyal customers can help boost your sales and gather more names in your customer management software for future marketing efforts.
Why set up a loyalty program?
According to Jupiter Research, approximately 75 percent of consumers have at least one loyalty card. When implemented well, these programs can benefit both customers and businesses alike.
Shows customers they are valued. It is one thing for a business to say “thank you” at the bottom of every invoice or receipt and another thing to communicate that feeling by giving a customer special offers and perks. Make people feel special for doing business with you.
Encourages return business. When people have a number of options to choose from, sometimes the mere knowledge they may earn a reward from a particular retailer is enough to influence their choice. If you place particular limits on your program – such as an expiration date – you may also be able to encourage people to shop sooner rather than later.
Helps you gather information. You can collect information from the members of your loyalty program to learn more about your customer base. For example, some programs offer you the opportuntity to track customer spending habits with your customer management software and gather data on demographics. Members of your loyalty program may also be more likely to return a customer survey and provide useful feedback.
Low-cost advertising. If customers see your name on a membership card whenever they open their wallet or on an email when they check their inbox, you are taking advantage of low-cost advertising. Additionally, the information gathered from these