The Benefits Of Customer Loyalty Programs
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When it comes to keeping your regular customers coming back for more, there are few better ways than by offering a customer loyalty program. Not only can they strengthen ties between business and customer, they can get that customer spending more than they would have ever done without it.

If you run a small business and haven't considered introducing such a loyalty scheme, it may well be the perfect time to think about it. With family budgets being squeezed further than ever and customers becoming more determined to bag a bargain, a loyalty scheme could see your business counter the downward trend in sales.

 

Simplicity Is Best To Start With

While the really complex customer loyalty programs are able to collect detailed information on each purchase and offer points on various items and actions, any business can start off with a relatively simple offering.

The most common of these is offering a free product or service once a customer has purchased X items previously. Restaurants are great advocates of this model and will often give customers a free dessert, drink or even main course when certain milestones are met – e.g. free cake after 5 visits followed by a free main course after 10 visits.

Businesses who offer physical products can give a discount voucher after a set number of purchases of a certain amount (e.g. 5 purchases over $25) or they may allow smaller basket values to count by offering a rolling total card (e.g. a $25 voucher once a customer has spent $200).

These low cost setups are blessed with simplicity and while you might not get the added bonus of customer data, there is little doubt that people love them with many walking around town with a number of different loyalty cards in their purse or wallet.

 

Keep Them Coming Back

In some sectors, customers have a large amount of choice of where to go and one of the main reasons for having a loyalty program is that, while a relatively small token is offered up in terms of a reward, it is often enough to encourage brand loyalty.

Coffee shops are a prime example – many high streets will have several to choose from but if a customer has a loyalty card offering a free croissant with every 5 stamps they collect, they are far more likely to opt for that store over the alternatives. Remember - people love free stuff.

One of the best reasons for keeping your customers loyal is because acquiring new customers is often far more expensive than customer retention which means greater profits per customer for you.

 

Get Them Coming Back More Often

With the very best loyalty programs, customers generally find themselves returning even more often than they would have otherwise done. In these cases, the reward is tempting enough for people to arrange their plans around a visit to your store.

A men's barbershop is a good example because the reward of a free haircut can allow the man in question to look his best for less. Instead of delaying a cut until the very last moment, he might be more tempted to visit a week earlier each time, safe in the knowledge that he will earn a free cut at some point down the line.

Companies in the service industry are in an especially good position to get customers returning on a far more regular basis and these additional bookings can really help fill spare capacity in the business. To ensure this happens, stipulate the times when a reward can and cannot be claimed. So if you are generally full to the rafters at the weekend, ensure that the rewards can only be redeemed on weekdays.

So no matter how big or small your company, it should be able to benefit from a customer loyalty program. If you find that your takings are not up after implementation, ask your customers what is holding them back from using your program and adapt it to their recommendations.

Loyalty programs are not a magic bullet but as part of an overall marketing strategy, they can help you maintain loyal customers and as we have seen, this can be a huge boost for businesses which are facing increasingly hard times.

 

About The Author

Steve Waller has been running his own business for 5 years and worked in the marketing departments of 2 large companies before that. He now helps small businesses such as Bentley Accounting to attract new customers via a strong online presence.