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7 Tips for a Starting a Successful Customer Loyalty Program

7 Tips for a Starting a Successful Customer Loyalty Program

By Caron_Beesley, Contributor
Published: March 28, 2013

Got a loyalty card in your wallet?

Small business loyalty programs are a great way of showing customers that they are valued. They encourage return business and help you gather information about your customer demographic. Loyalty programs can also boost your marketing efforts. According to Experian CheetahMail, email campaigns that target loyalty program members are more successful – generating higher open rates, transaction levels and revenue. Even emails that invite prospects to join loyalty programs outperform regular email blasts.

Of course, getting your loyalty program right is critical. Industry experts believe the future of loyalty programs lies in mobile technology. But not everyone has a smartphone or the right app loaded to take advantage of your program. The key is creating a program that is accessible to all and easy to use.

Here are seven tips for starting a small business loyalty program:

The Easy Way to Go – A Loyalty Punch Card

If you’re new to loyalty programs and want a low-tech option, the simple punch card formula is a good place to start. Just design and print out a card and offer a free gift after a certain number of purchases have been made. There are a few obvious drawbacks to this method – you can’t track consumer demographics and the program is 100 percent reliant on customers’ carrying that card around with them in their wallet. That’s if they even remember it’s there!

Start an Opt-In Program

Another easy option is to set-up a simple “sign-up for offers/rewards” program. Ask customers to share their email addresses and add them to an opt-in email list – you can do this online or at the point of sale. This form of email sign-up eases the application process and spares your customer the hassle of having them download an app or share heaps of personal information. In exchange, you’ll promise to send them regular communications and special offers only available to loyalty members. As mentioned above, email campaigns that target loyalty members can be a great source of revenue – and, of course, are trackable.

Consider a Premium Loyalty Program

If you want to reward customers who spend the most, develop a program that limits who may be eligible to qualify. Use your customer relationship management software to track higher value purchases over time and invite customers who meet certain thresholds to join. Alternatively, simply invite high-spending consumers to sign up for your program at the point of sale.

Offer Branded Loyalty Membership Cards

There are a number of commercially available loyalty card services that let you design branded cards, track and manage customer behavior such as number of customer visits to your store, average spend and more. Many also let you send targeted email and text campaigns to members. You can even add on other services such as branded gift cards.

Add a Digital Component

While not all your customers will be digitally savvy, chances are many are and it’s increasingly important that you cater to the growing mobile loyalty trend. There are many apps that small businesses can tap into for free or for a fee. If your business already uses a mobile payment platform, many of these are now integrating loyalty programs into their offerings. Explore your options and look for services that offer social media integration – making it easy for customers to share your awesomeness with their friends and even earn points for likes, shares and online reviews.

Choose Your Incentives Carefully

Reward loyalty with some class. Freebies don’t always appeal to all and they can even de-value your services. For small businesses, customer loyalty is founded first and foremost on great service, a personal greeting, and the tried and tested quality of your products or services. So think of ways you can make your incentives and rewards as unique as your business. Experiential rewards are always popular. For example, a hair salon could offer a monthly workshop that offers free makeover tips to loyal customers. These experiences add value to your customers’ lives, build community, help your business stand out and give customers reason to keep coming back.

Communicate Regularly With Your Members

Treat your loyalty members royally. Segment them out in your email and direct marketing efforts and communicate with them often. Share news of upcoming loyalty incentives or events and don’t forget birthdays – offer something unique to members or opt-in email subscribers during their birthday month.

What loyalty program strategies have worked for your small business? Leave a comment below.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley