Have you ever earned a free coffee after purchasing nine at the coffee shop? We bet you have. In fact, besides the great tasting latte, we’ll bet the free coffee is 50% of the reason you’re going back. Or maybe it’s the free coffee on your birthday. Maybe it’s the free yoga class you get when you buy a 10 pack of visits. Typically, you are going to continue to visit the place that gives you the “deal” or the “loyalty reward” in return for your patronage. This is precisely the type of behavior that a customer loyalty program can bring to your small business.
So, what is a anyway? A loyalty program is a program and a process whereby customers are offered rewards and incentives provided they keep shopping at a particular business. A good example are rewards cards given by pharmacies and grocery stores, and “frequent buyer” card given to loyal customers by restaurants and coffee shops.
If you are still skeptical concerning if loyalty program will be beneficial for your small business or not, here is some evidence backing up the benefits a loyalty program can have for your small business.
- It helps in growing your small business. Even if you have customers coming in and out of your brick and mortar business from every direction, what is the percentage of your repeat buyers? Even if your repeat buyers make up a small percentage, they still constitute a large majority of your total deals. Adding a loyalty program into your small business is a really good way to strengthen the loyalty to your business, at the same time, increasing sales.
- A Perfect way to retain customers. This is exactly what was mentioned in the introduction statement. Getting new customers can be expensive, and quite hard, but the important part is how you treat them after gaining them. This is really important if you will like to retain your customers. Giving your customers an extra reason to come back, such as rewards or loyalty program makes it more likely for them to want to come back and do business with you. Loyalty programs encourage repeat purchases. It is a good way to entice buyers to stick around.
- Rise above the competition. Many times, small business find it quite difficult to compete with larger brands due to lack or resources. However, an easy way for small businesses to remain competitive and display their personal side is through a customer-loyalty program to help differentiate their business even if their offerings are similar.
- It Helps Keep Costs Down. Every customer has a “cost of customer acquisition.” These costs are calculated by the cost of sale, advertising, marketing, etc. It can be very expensive. Enticing your customers to keep returning and making more purchases is usually cheaper than sourcing for new ones. If it means you have to offer some discount card or loyalty programs, try as much as possible to get this done. Keeping a customer is less expensive than acquiring new ones.
- It Keeps Your Customers Happy. A loyalty program translates to the fact that you appreciate and care about your customers. It is a way of saying, “Thank you for making use of our product or services. We really appreciate you”. Furthermore, when you keep your customers happy, there is a great chance that they will tell their family and friends about your business. This will definitely generate a new set of customers for your business.
In summary, customer loyalty programs are not only for big brand businesses. They likewise have a lot of benefits for small businesses. It is a good way of increasing sales, helping you stand out, and also developing a long-lasting relationship with your customers. If you are yet to implement this into your business strategy, try as much as possible to do so.
If you have questions about setting up a loyalty program for your small business, please reach out to us here, or call us at 888.980.8170.