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Creating Customer Loyalty Programs

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Creating Customer Loyalty Programs

By Rieva Lesonsky, Guest Blogger
Published: March 19, 2013


These days, loyal customers are hard to come by. So when you do have customers who are faithful to your business, returning day after day and year after year, you want to reward them. But how? There are many ways to reward your loyal customers, from simple paper-based methods to mobile apps and more. Here’s a look at some different options to consider.

Rewards cards: Depending on your customer base, your budget and how sophisticated you want to get, you can start at the basic level with paper punch cards (“Buy 10, get one free”). You can also use plastic loyalty cards that you swipe to track customer purchases and other data, which can be more useful in helping gather information for your future marketing programs than are paper cards.

Discount programs: Consider rewarding loyal customers by giving them a discount when they reach a certain purchasing level or if they buy a certain number of items within a specified time.

Give a gift: One great way to encourage loyalty is simply by tracking a customer’s relationship with you and other important data. For instance, if you record the date of first purchase, a customer’s birthday or other relevant dates, you can give them a gift on those “anniversary” dates. You can also offer gifts with purchase (like cosmetics companies do, with great success) when customers buy a certain dollar amount or volume of product.

Create a VIP program: Allow customers to sign up for a VIP program where they get some type of reward relevant to your business. This could include discounts on purchases, special sale days just for them, advance notice of sales or access to special information such as a VIP email newsletter.

Hold events: Events for loyal customers can be a great way to reward them. Consider opening your store or business at a special time for them to shop; holding a special dinner at your restaurant that only your “regulars” are invited to; or holding a seminar or training session for your faithful service business customers. The ideas are limited only by your business.

Mobile apps: Applications such as Belly, Spendgo and Womply streamline loyalty by enabling customers to enter or swipe their account information, using smartphones or tablets, to win prizes, get store credits or free products, or get cash-back rewards for making purchases. You can customize the rewards programs to work with your goals.

Get personal: Sending a handwritten thank-you note or making a phone call are very meaningful ways to thank your loyal customers that they won’t soon forget. In fact, in today’s digital world, these old-fashioned methods just might be the most memorable and effective customer loyalty tools of all.

About the Author:

Rieva Lesonsky
Rieva Lesonsky

Guest Blogger

Rieva Lesonsky is CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at and visit to sign up for her free TrendCast reports. She's been covering small business and entrepreneurial issues for more than 30 years, is the author of several books about entrepreneurship and was the editorial director of Entrepreneur magazine for over two decades


Rieva - fantastic article. You're pointers are spot on. One thing that I think is important to mention is that loyalty programs, like a garden, need tending. You need to ensure that you are meeting your customer needs or they will not remain loyal for long. Retailers need to be creative when it comes to rewards. Anyone can give a free this or that - what is important for retailers to remember is that you need to make your customers feel special!
Nice article - many good ideas and suggestions here. I too, like the last suggestion - I sure know I appreciate it myself. I work in the loyalty sector, think you are spot on with the many variations here - each business must see for themselves which approach will fit them and their customers. Thanks!
I agree with you rkalani, I also enjoy the last suggestion the most. I think when you take the time and show the customer you care enough that you are willing to hand-write them a letter, it really shows that you not only remember them but deeply appreciate them. Thank you for the great article Rieva and rkalani for pointing out one of the great points.
One helpful tip for loyalty programs would be to always do offers that are X dollars off of Y... Instead of X% off. For example, in my retail store we used to have a promotion for $20 off of $100. This feels like 20% off to the customer but it is only 20% off if the customer spends exactly $100. If the customer spends $200 you are only losing 10% of the sale and the customer is still happy to get his/her $20 off. If you were to do this same promotion and offer 20% off and the customer spent $200 you would lose $40 from the sale.
I have had success with client loyalty programs. I think that it is easiest when you track the benefits for them so that they dont have to mess with a punch card - at least that is what has worked best for me.
Great article! Customer Loyalty is extremely important to grow one's business and having programs make it easier to have it.
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For a business that relies primarily on walk-in-customers it would be very helpful for them to be able contact their customers. A loyalty program with an easy registration process e.g. mobile phone number could be the first step. Registered customers can receive deals and special offers and business owners are able to drive traffic when business is slow. It is a lot more costly to gain new customers than to retain existing customers. A low threshold customer loyalty program keeps existing customers happy and helps word of mouth - happy customers talk...
I like the last suggestion the best - getting personal with your clients. Clients will never become advocates because of a Buy 5 Get 1 free promotion. To really win people over, you need to make a connection on a more emotional level. Great article Rieva - thank you!

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