You’ve heard it said a million times – it’s much cheaper to keep an existing customer than it is to acquire a new one. That’s great and it’s one of those things people like to spout off at business meetings, but what are you actually doing to keep your customers loyal? What are you doing to get them to spend more money?
Hopefully, you’re already covering the basics, like providing great service and a memorable customer experience, delivering products and services that exceed expectations, and focusing on building relationships with customers. These things are all important, but here’s the truth – they might not be enough.
The fact is that you have more competition than ever before. Yes, you have your competitors to worry about, but you also have businesses outside your niche to worry about. Your customers have more entities vying for their money, and if you want them to keep spending their money on your products and services, you need to give them an extra incentive to do so.
That’s where customer rewards cards come into play.
For decades, customer loyalty programs have been used by businesses of all sizes to reward customers and to keep them coming back. Ever gotten a punch card at a sandwich shop? For every certain number of sandwiches you buy, the shop gives you a free sandwich. It’s a pretty simple concept, and it works.
Airlines use customer rewards cards too. For each flight you book, you accrue a certain number of miles or points on your card. As those points tally up, you can spend them on future flights. (Factoid: American Airlines created the very first frequent flyer program back in the early 1980s.)
Nowadays, businesses of all sizes and in just about every industry are using customer rewards program to improve customer loyalty and to make more sales. From Best Buy to Amazon to the frozen yogurt shop down the street, companies are finding success with these rewards programs.
In fact, companies now spend over $2 billion each year on loyalty programs. Furthermore, the average consumer is a member of about 18 different customer rewards programs.
Starting a Customer Loyalty Program for Your Small Business
When you see the benefits of offering a customer rewards card—such as improving customer retention, increasing sales, and even attracting new customers—it seems like a no-brainer to do this for your small business. And the truth is that your business probably does stand to gain a lot by launching a customer loyalty program. However, it’s important to realize that printing up some customer rewards cards and starting a loyalty program isn’t a guarantee of success on its own.
The fact is that a lot of customer loyalty programs fail. Businesses fail to communicate on a regular basis with rewards members; they make it hard for customers to understand the program or to claim their rewards; the rewards they offer aren’t enticing enough to keep customers coming back; they offer too big of rewards that cut into their profits; they have no strategy or goals for their program…the list of reasons for failure could go on and on.
So, how can you make sure your small business gets the most out of a rewards card program?
- Set goals—What exactly do you want to get from your loyalty program? Be specific. For example, you might want to increase sales by 10%. Or you might want to improve customer retention by 25%. Setting clear goals will help you track the performance of your program so you can know if it’s working or not.
- Devote the time to make your loyalty program work—You can’t just throw together a customer loyalty program and then forget about it. You need to spend time researching your customers, exploring different options for your loyalty program, and testing out different variations of the loyalty program. All of these things take time.
- Communicate with members—Don’t just hand your customers a rewards card and disappear. One recent study found that 85% of loyalty program members hadn’t heard a single word from the companies since signing up for their programs. You must stay in contact with your customers. Educate them about your rewards program. Send them special offers. Ask for their feedback. It’s all about building relationships!
- Make your loyalty program unique—With so many businesses offering customer rewards programs these days, you really need to focus on finding ways to make your program unique. Find a way to make your loyalty program memorable so customers will have a reason to go out of their way to do business with you. It must offer advantages over your competition.
- Promote the program—Make sure your customers actually know about your program, and better yet, don’t let them forget about it. For example, one easy way to promote your customer loyalty program is to give your customers actual plastic customer rewards cards to keep in their wallet or on their keychain. This legitimizes your program and it helps your business earn mindshare with your customers. Buying an ID card printer system to print your own high quality customer rewards cards could be a smart investment for your company.
With careful planning, a customer loyalty program could yield some powerful results for your small business.