Build a fantastic customer loyalty programme

Loyalty programs are ongoing campaigns designed to keep your best customers engaged.

Today’s savvy customers expect more than great service and quality products – they want perks as well – or they just might take their business across the street. Fortunately, loyalty programs 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 programs are ongoing campaigns designed to keep your best customers engaged.

Creating a successful loyalty program

A well-designed loyalty program can help make your business the first choice for customers. However, designing an effective program requires work, research and continued engagement beyond what you find in standard promotions.

A one-time discount that’s offered to every customer may bring new business your way and increase your exposure, but it may not bring repeat business and it will not succeed in making your best customers feel special.

Point cards and free perks 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'll also see a rise in visit frequency, customer spending and satisfaction. And once people start talking about your loyalty program, you may even draw some new customers away from the competition.

Treat your best customers

What you’re looking to do is select and reward your most valued customers.

For instance, if you operate a café you could offer a customer loyalty card that gives customers every sixth cup of coffee for free. Or offer discounts to regular high-volume customers above your listed prices. You could host special events, giving your regulars first opportunity to sample a new product.

Use your small business advantage

Most large enterprises have customer loyalty programs, and are able to develop large databases on customer preferences and behaviour. As a small business, you probably don’t have the resources to mine data as closely. However, you may be able to compensate for this issue by being more personal and responsive.

To make individual customers feel special, you should get as personal as possible without being intrusive. Collect detailed information on your best customers and spending habits and develop a database for sending out special offers or promotions. You can use this to send “thank you” messages after major purchases, or promotional offers timed for major events – including personal ones such as the customer’s birthday.

If a customer has a particular product preference or need, make a note and send them reminders about newly-received shipments. If a product is rare or 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.

Keep it simple

Your customers want something simple, but of value to them. Try to be creative with your perks. You'll want to offer rewards that set your company apart from the other businesses that offer another "buy 10, get one free" card.

Some companies can differentiate by offering a free sample-sized product or a discount that can be applied to a choice of service. One of the easiest ways for small businesses to start a loyalty program is via a newsletter subscription. You'll stay in touch with your subscribers, keeping your products and services top of mind, and keep your loyal customers happy with valuable "just for them" benefits.

What type of reward should you offer?

Take a look at the data provided by your most loyal customers. How frequently do they make purchases and how much do they spend? Next, consider what you want to offer. Popular options include a points system, discount card, free shipping and special one-time offers (like a free tote bag with purchase). Whichever program you choose, make sure it enhances your brand and key messaging.

Use an all-in-one solution

As your business grows you may want to implement a more sophisticated loyalty program, just like the major brands do. A simple solution to handle your customer data and tracking is to use an app designed for the job. Your customers will appreciate an easy to use program that eliminates paper and plastic, and you'll enjoy the benefits of the program minus the hassle.

Ready-to-go loyalty program apps

  • Foursquare offers a merchant platform and reward system, and is also great for driving local traffic in store with their online reviews.
  • Club Ovahi is an innovative mobile app that allows customer to access rewards by smartphone with scannable QR codes.
  • Brownie Points let customers collect points in-store at point of sale using a card or mobile app via a tablet.

Another all-in-one loyalty program solution is Vicinity, a platform that integrates with your point of sale software. Your customers simply provide their phone number to register. When they've earned a perk – typically a discount or redeemable points reward – they'll be notified by text or email.

The key with any loyalty program is to keep the process simple and achievable for your customers. After all, you may never have earned enough points for a flight with your airline rewards card, but you'll remain a loyal customer if it's easy to earn smaller rewards along the way.

Share the good news

Spread word of your new rewards program through all of your communication channels, including email, social media, newsletters and employees. Encourage customers to try your new program by gifting them some starter points or purchase credits (like a couple of free stamps on the coffee club card), or by offering an additional percentage discount from their next purchase when they start using the program.

Rewards for you, too

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

Next steps