Five Keys to Building a Strong Loyalty Program

In the world of small and medium businesses, a one-time customer is a lost opportunity. New customers are expensive to acquire and don’t spend as much per visit. Returning customers not only provide consistent revenue, they can also pay off in a big way by becoming advocates for a brand or business. Word-of-mouth advertising is a powerful marketing asset and doesn’t cost you a dime. So, how do you keep your customers coming back for more, while also convincing them to spread the word?  A loyalty or rewards program can sway purchasing decisions, drive customer engagement and give a business the momentum it needs. Below you’ll find a few hallmarks of strong loyalty programs that can make a difference to your bottom line.

#1: Know Your Audience

Create rewards that are attractive to your customers and will prompt them to return. Use current sales data to see what’s popular—customers will respond to what’s hot. Test a few different offers and see which ones spike interest. Or, simply chat with your customers.  Get to know them and ask what is meaningful to them and what they value about your business. This helps you build relationships and get a direct line to feedback.

#2: Keep the Program Simple

Don’t create a program that requires too many steps or one that makes your customers jump through too many hoops. Your loyalty program should be easy to join, easy to understand and easy to redeem.  Rewards should be clear and uncomplicated, without too much time between purchase and reward.

#3: Make the Rewards Worthwhile

Customers assign value to loyalty rewards, so they should be meaningful and worthy of their time. Offer different levels of rewards, so that once a customer reaches a certain level, they receive more benefits or better awards. For example, rewards can range from a free coffee to a free entree. This way customers who prefer instant gratification can achieve it quickly, while “savers” can have a goal.  It’s also a good idea to reward new customers for signing up and to say, “Happy Birthday.”

#4 Train your Employees

Your employees are on the front line and the most important promoters of any rewards or marketing program. If they don’t talk about it and try to sign up every customer, your program won’t work.  It should be standard practice to add every customer to your rewards program. Make sure they understand and can explain, clearly, what types of rewards are available, how they are earned and redeemed.  Have frequent updates to train new staff, so that your program doesn’t suffer because of employee turnover.

#5: Market the Program

Your employees should not carry the full burden of marketing a rewards program.  Publicize it throughout the customer journey. Capture email addresses as part of the sign-up process so that you can send messages to introduce the program, reinforce the benefits and to notify customers of special deals just for loyalty members. Consider putting signage in the store to encourage sign-up. It’s always a good practice to share details about the program on social media, especially if you are introducing new rewards.

Loyalty programs are easy to implement, but success depends on the execution. When you have a program that is customer-centric, simple to understand and easy to communicate, customers are more willing to participate. As a result, a loyal customer base can help you grow your business faster than any other form of marketing.