You have poured your heart and soul into building your brand but it seems like you are always fighting for every customer?
You may want to consider implementing a Loyalty Program. As we know, the cost of keeping a customer is approximately five times less than gaining a new one. On average, 20% of customers are responsible for 80% of sales when it comes to small businesses. It is obvious that customer loyalty is essential for most small businesses to thrive!
Choosing the right Loyalty Program for your business is a great and cost-effective tool in customer retention. This does not mean printing out a stack of paper punch cards will have you rolling in cash. It is very important to understand what your customers value, and what loyalty program would match those values.
While paper punch cards may be the best option for your brand, nowadays the options are seemingly endless with many built right into your point of sale (POS) system. Here are a few options to get you started:
The Punch Card
While many will say this is outdated, this might actually be ideal for you. Say you are a coffee shop on a busy thoroughfare where the nine-to-fivers regularly travel to and from work. A punch card may be the perfect incentive to get the traffic into your coffee shop rather than the one on the next block. This is a simple and cheap program, but lacks the advantage of collecting info on your customer, which would be useful to send follow up email marketing.
If your clientele is just a tad tech-savy, and you like the punch-card idea, you may consider an application based punch card. You would receive your customer data, and the information could be integrated into your POS system. The customer may also appreciate not having to carry around a physical card, and simply use their smart phone to track their rewards.
In this type of loyalty program points are allocated to customers based on the dollar value spent at your business. As long as the rewards are clear, this is a simple system that encourages customers to spend more. The points system may be tiered to incentivize the customer to spend just a few more dollars to receive better discounts, early access to sales, or freebies. While simple for the customer, this takes a bit more effort for the business. Customer data needs to be kept up to date and it is important to schedule regular reminders to the customer of how many points they need to achieve the reward (which could be a free item, or cash-back). Most importantly, the reward has to be worthwhile to the customer.
There are many companies that now offer you a turn-key solution for a monthly fee. Customizable programs may also be found through many POS systems, depending on the software chosen. These allow you to collect customer data and use it almost automatically for targeted email campaigns. More complex programs can be created combining points, a tiered structure, etc. Your POS system can be programmed to let the customer know how many points they have with every purchase, or how many points left to reach a certain tier. The system could also let customers who have NOT opted into the program know the value of the points they are missing out on. A more integrated system could reward referrals, and social media mentions. Why spend money seeking out new customers when you could have your customers do the work for you?
Whether you’re looking to keep your customers or target your marketing efforts, a customer loyalty program is a great tool that if chosen carefully is a smart investment.