How to Start a Customer Loyalty Program for Your Small Business

customer loyalty

When operating a business, creating efficient and helpful products is only half the work. You also have to attract customers who will approach your business. However, many small businesses make the mistake of attracting new customers without retaining existing ones. A well-known fact of the business world is that customer acquisition costs more than retention, so why not develop something that makes them want to stick with your brand. This can involve ideas like creating a loyalty program that encourages customers to come back and make another purchase, whether you’re a supermarket chain or a retail store. 

Regardless of the industry, you’ll come across various issues concerning customer retention. For instance, if you shop for your household items, you may end up encountering customer loyalty programs at some of the most common and popular supermarket chains. The idea behind the implementation and adoption of a customer loyalty program is to increase the benefit exchanged between a business and its customers. 

To gain the mutual benefit of higher sale revenues and loyal customers, this post will share some important guidelines to help you craft an effective customer loyalty program. Before that, let’s find out the benefits of customer loyalty programs and how you can take them into 2022.

What Business Achieves With a Customer Loyalty Program?

According to statistics, with the provision of a reliable and rewarding incentive, 75% of customers are more likely to make a second purchase.

  • Cost Savings and Better Sales Potential

Business owners are aware that only happy and satisfied customers will stick with their brand. Hence, they apply customer loyalty programs. This makes customer retention a more cost-effective approach as opposed to acquisition. 

  • User-Trusted Reputation

A business relies on the reputation it builds among customers. Entrusting loyal customers to write reviews and produce feedback-based content on the internet for your business through a customer loyalty program can boost business/ brand image. Social media and websites are efficient platforms for you to market your brand and business products, building a user-trusted reputation.

  • Spreads Good Word of Mouth

You don’t require any explanation over what good word of mouth refers to, right? Well, when you offer rewards and incentives that entice and keep customers loyal, they are sure to invite their friends and family. When you look at this from a creative angle, you are receiving verbal promotion across a range of potential customers when your loyal customers share details with people they know, including family, friends, and colleagues.

  • Keep Customers Loyal

Lastly, a major benefit of offering a customer loyalty program is that customers will prefer purchasing products from your business when they know incentives await them. The effectiveness of your customer loyalty program depends on how well you meet customer needs. Once you offer desirable rewards and give-backs to customers on their purchases, they develop a connection with your brand. 

Related: What Makes an Optimal Customer Experience in 2021?

8 Critical Elements to Include: Starting a Customer Loyalty Program

Here’s how to create a customer loyalty program that keeps you and your business revenue models happy:

1. Find the Perfect Name for Your Program

To get your business’s customer loyalty program rolling, make sure you give it a good name. A good name isn’t doesn’t just stand out from the rest; it should relate to customers’ needs and requirements. The basic premise of a customer loyalty program is to pique customers’ interest and curiosity. 

2. Instigate a Profound Meaning in the Program and Its Name

Customers will only opt for a loyalty program if they think it will benefit them. You must that your loyalty program doesn’t just look like a tool that chains customers to your business. You have to choose a name that relates to your customers’ needs.

On top of that, your customer loyalty program should have meaning. It should make sense to customers and add value to their shopping experience in your business. Sure, customers can appear cynical at first, but choose the right time to introduce the program and market its benefits. Over the course of time, you can achieve the desired rate of customer retention.

3. Offer Incentives Across a Range of Customer Actions

So, how can you make your customer loyalty program meaningful? This depends on how you will reward customers. Will you only reward them for making a purchase? Or will you reward them for other consumer actions, such as reviews, social media profile engagement, and sharing reputation-based content? 

You should reward all sorts of customer engagement for a holistic loyalty program. Whether it’s promotional offers or discount codes, make sure you keep them happy with adequate incentives 

4. Plan Multiple Reward Types

For your customer loyalty program, it is best to introduce a dynamic range of rewards and incentives. For example, you can’t keep offering discount codes to customers, especially not on the same level and products. You have to incite creativity and work on the best possible ideas to include appealing rewards for most customers.

A practical example of a customer loyalty program reward is the provision of loyalty points. You can let customers gather points and then let them choose between free products, movie tickets, or privileges through mobile phone applications.

customer loyalty5. Calculate and Add Value to Customer Loyalty Points

In simple words, don’t forget to make it worth customers’ time and money. If you think a customer is enjoying purchases in your business, you can introduce them to loyalty points. Loyalty points are intended to be a marketing tool that brings the customer back for more purchases. Let’s say you sell shoes, but there are plenty of other shoe retailers in the area. In that case, what exclusive benefit do customers get from buying your shoes? 

If you provide loyalty points that customers can gather to get different types of rewards, customers will come around your shop more often.

6. Introduce Non-Monetary Incentives to Loyal Customers

You don’t always have to provide monetary rewards to customers for their efforts, including good word of mouth and consistent purchases. To help your business grow and keep customers happy on all ends, you can rely on non-monetary incentives as well. For instance, there’s a diverse group of minorities, political issues, racial issues, and financial events that happen around the country. You can try showing support for the cause that your customers side with.

While this won’t impose any legal implications (as long as you don’t go off-track in showing support), you can show solidarity with customers for the struggles that they’re going through.

7. Allow Enrollment via Several Gateways

You can’t leave the customer loyalty program hanging like a fishing pole in a pond, hoping that customers will catch on. It’s best to promote the benefits and allow existing customers to learn about the loyalty program you’ve introduced. More importantly, you must provide different enrollment methods inside your loyalty programs.

For example, some of the most prominent business leaders across several industries let customers enroll customers in the loyalty program through credit/debit purchases.

8. Work Out Partnerships for Inclusive Incentives

Aren’t two rewards better than one? Well, it’s a simple idea but quite effective in retaining customers. If you’re offering a type of reward, such as a free smartphone giveaway by pooling names of the most loyal customers, what’s stopping you from allowing another business to take part in the draw as well? For instance, a wireless earbuds or headset company could attach their own product as an incentive for you to engage with customers through the loyalty program.

While customers will review this as a “not one, but two rewards!”-type of deal, it allows you to form reliable partnerships in your pursuit to acquire more customers. 

Most Practical and Effective Customer Loyalty Program Ideas

As a small business, you have to remain creative in the market. This is because not all growing businesses are enjoying a massive increase in sales or profits. In addition, larger businesses have a constant financial influence in the market, which allows them to perform huge marketing stunts.

Due to that, small businesses have to devise plans and create customer loyalty programs in such a way that helps them maintain dynamism and increase their customer base.

Here’re some common forms of leverage that businesses use to facilitate the success of customer loyalty programs:

  • Free Trial Services
  • Opt-In Newsletters (Email Address)
  • Point Systems
  • Referral Programs
  • Partner Programs
  • Loyalty Discounts

Final Thoughts

In any case, customer experience should be a priority and cornerstone of a customer loyalty program. You cannot risk crafting a customer loyalty program that doesn’t hold value in the eyes of customers and doesn’t make their purchase journey interesting or rewarding. No customer loyalty program works wonders overnight in attracting customers to your business. But, with appropriate efforts and incentives in your customer loyalty program, you can retain a large proportion of your customers. Besides, don’t loyal customers deserve some form of appreciation for sticking by your business for their needs?


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