Customers are fickle beasts. Driven by their pain points, they’ll happily switch to your competition if they feel they offer a better solution. As acquiring new customers costs more money than keeping your old ones, it makes business sense to encourage customer loyalty. One way to reward customers for sticking with you is by launching a loyalty program.
What’s a loyalty program?
A customer loyalty program rewards customers for their repeat business. They come in many different shapes and sizes from low-tech punch cards to more complex tiered membership programs. There are both benefits and downsides to running a loyalty program.
The pros of loyalty programs
- Increase customer retention
- Attract new customers
- Stand out from the competition
- Get valuable data on your customers
The cons of loyalty programs
- Needs frequent monitoring
- Can eat into your profit margin
How to build a successful program
Most small businesses do stand to gain from setting up a program. However, running a successful one takes more effort than simply printing off a bunch of reward cards. To get the most out of your program:
- Set goals – the more specific the better. These help you track the success, or otherwise, of your program
- Make it simple otherwise people won’t use it
- Focus rewards on your pain points. If sales are slow on weekdays, offer a financial incentive for members to shop then.
- Tell customers it exists. Promote the program in email newsletters, on social media, store signage, and via staff.
- Keep communicating. Build a relationship with members by staying In touch. Send them emails notifying them of special offers. Ask for feedback.