Launching a great customer loyalty program is the ultimate way to work smarter for your small business, making you more sales while holding onto more customers – here’s our guide to getting started!
Step 1: Decide what kind of rewards you want to offer
How you choose to reward your loyalty members is up to you, and you can have a mix of different types of rewards too. Most people are aware that loyalty programs are part of a marketing scheme that ultimately benefits the business – and that’s okay, after all it’s the goal of most actions taken by commercial entities. However, what sets a good customer loyalty program apart is how much genuine value it also offers its members in return. For the broadest appeal to different types of consumers, it’s best to diversify the way in which you offer rewards.
These rewards can be whatever you imagine, but some examples include:
- Points (that translate into a Rand value)
- Gifts
- Discounts or exclusive sales
- Early access to limited or special products
- Free shipping/delivery
- Subscriptions to new product lines or services
- Access to better payment, financing or credit options
- Better trade-in deals for luxury upgrades
- Free tickets to carefully targeted events, experiences or entertainment (plus, they’ll talk about it afterwards to their friends)
- Donations to a charity – offering value that runs deeper than financial gains, by making members feel good, and aligning with their values.
In the end, whatever you choose, it’s vital to make sure that your business can afford to give the reward you’re hoping to offer – check out this article for some technical help on calculating what you can (or should) afford. Either way, it’s best to start off modestly: you can always up the rewards later, but people will be up in arms if you reduce them because you’re not coping.
Step 2: Decide what customer behaviour you’ll reward
At a basic level, you’re rewarding customer loyalty, but there are many different actions that people take to support a business. Use rewards to help steer customers in the direction that will most help you meet your goals: for example, if you notice particularly slow days becoming a trend, then incentivise spending on those days by rewarding purchases made at that time. It’s also good to show customers that your program is not just a greedy ploy to increase sales (even if it is), by rewarding behaviour other than buying, too.
Some examples:
- Making a purchase above a certain Rand value
- Buying a specific product or line (that you may want to move faster)
- Buying during a slow time of day, week, or month
- Referring a new customer
- Social media: mentioning your business or product, following, and sharing
- Watching product videos
- Engaging on your mobile app
- Subscribing to your blog or email list
- Engaging with content online, like blogs, videos or podcasts
- Answering surveys that help your business to collect useful data
Step 3: Make the program something your customers will want to join
Look at what you’re trying to achieve from your customers’ perspective – and this means you need to know exactly who they are. Are your clientele the kind of crowd who would like a quirky retro card to carry in their wallet, or are they tech-savvy and would probably prefer a digital version with more bells and whistles? How does this program offer value to them, specifically, in terms of how they like to shop and interact with your business? If you’re really lost, ask real customers and start there.
You can also up the appeal by collaborating with another compatible company that your target market loves, by offering a mutually beneficial deal. This gives both businesses access to more customers, while also making it possible to offer even more value to participants. For example, a spa could gift a coffee and slice of cake at the cafe across the street with every pamper package purchased, and the cafe could reward their members with a free massage when they buy a special combo lunch. For some inspiration, check out this article on examples of innovative customer loyalty programs in action.
Step 4: Choose your platform
Now it’s time to look carefully at the different customer loyalty program formats, apps and service providers, and do some digging for the best options for your needs and customers. Some questions to consider: Is it easy for your staff to understand and use? Is it easy and convenient for customers to use? What are the costs, both initial and recurring? Can it integrate with other software you rely on, like POS, accounting, or email marketing? Is it flexible enough for you to tailor to evolving business goals over time, perhaps allowing space to explore different rewards and allocations? How well does it capture and format data for insights?
Some common examples best suited to small businesses:
- Punch cards: These are very easy to use and create, but customers must always have theirs on them, and if they lose it, they lose all their progress. No software is needed and printing costs are relatively small, but it’s much harder to track data. Luckily, there are plenty of online tools to help.
- Scannable membership cards: They require your POS software to work with the barcoded cards, and customers must have theirs on them. Although, newer versions allow a digital wallet format with a QR code, and more sophisticated rewards options.
- Email or message opt-in: These ask customers to opt in by completing an action (usually responding to an SMS or email), to get newsletters and special deals. Customers don’t need to bring anything with them, and it can easily form part of an existing email/messaging marketing strategy. .
- Loyalty program software for apps: There are loads of innovative options out there, tailored to different niches and industries, with a range of valuable capabilities that can be developed over time. They’re always with your customer on their smart device, and create yet another platform to connect on organically. If you choose to go digital, make sure the app is fast loading, mobile- friendly, easy to use, and that it integrates with your sales/payment system seamlessly. Check out these resources for the best customer loyalty program apps – here and here.
Step 5: Get customers excited and signing up
Once your customer loyalty program is ready to launch, go nuts promoting it: put signage up all over your shop, post on social media and your website with links to where to join, contact your emailing list, and make sure that the first special offer is very enticing and significant. The trick is to demonstrate the value of signing up, and to make joining quick and easy, on as many different platforms as you can manage.
Staff training is crucial in the smooth execution of sign up and keeping shoppers engaged with the program. They should keep promoting with every sale too, by telling customers about the kinds of rewards they could be getting if they joined. If you’re an online business, clearly indicate how many points each purchase would have earned the buyer on checkout (with a link to sign up).
Tracking your success
To see how well your customer loyalty program is doing, compare the following two powerful metrics, for customers enrolled vs those who aren’t:
- Retention rate: how long customers keep coming back to your store
- Negative churn rate: the rate at which customers upgrade or increase their purchasing behaviour
The most intuitive way to measure success, and find out the specifics of how you can improve the overall experience, is to ask your members about it with satisfaction surveys (hint: offer rewards for completing them).
Setting up your own customer loyalty program from scratch will take some creativity and planning, but your business will soon be rewarded too. Keep it simple and customer-centric, with a personal touch, and you can’t go wrong.
