6 tips to help you get your loyalty programme right

6 tips to help you get your loyalty programme right

We all know that repeat customers cost WAY less to hang on to than it does to acquire new customers. That’s not to say you shouldn’t invest in bringing new customers through your door, but having a strong loyalty program is something that should be in place for a retail business from day one. The size of your repeat customer base, the amount each spends and how often they purchase will have a huge influence on the long-term viability of your business.

 

 Why is loyalty important?

 

A well structured loyalty programme can help you to:

 

  • Increase customer visits
  • Increase sales at slower times of the day – or days of the week
  • Sell more items in each transaction
  • Stand out against local competition
  • Boost sales of slower moving products
  • Introduce new products
  • Increase your customer base via brand advocates and word of mouth recommendations

 

The great news is that a customer loyalty program don’t have to drain a small business’ budget. Okay, multinational chains will spend millions on their loyalty programmes but there’s so much that can be achieved on a shoe string budget.

 

At its simplest, a stamp card type loyalty program could be run with a limited printing budget.

 

However, with consumers rapidly going mobile and the cost of technology dropping, small businesses no longer have to waste time and money printing cards and buying ink when they can opt for a affordable mobile customer loyalty solution.

 

Whether you opt for paper or mobile loyalty – or both …

 

Here are 6 tips to help you get your loyalty programme right

 

  1. Think about your objectives.

    Is it about holding onto your existing customer base or about gaining market share? Are there quieter times that you could really do with boosting your sales? Do you want to shift more product with each sale?

 

  1. Consider your customers.

    Are they older and therefore more comfortable with a paper/plastic loyalty scheme? Do they have too many cards already and more likely to lose, damage or forget their paper cards? Are they regularly glued to their mobile screens and therefore likely to prefer a mobile loyalty programme instead of something on paper?

 

  1. Check out what other businesses are doing.

    By all means it’s good to see what the larger chains are doing nearby, but also check out what the smaller businesses in your area are doing too. Also look a little further afield to see what businesses similar to you are doing. Maybe even pick up the phone and ask around – you’ll be surprised at how many will be happy to share their successes and failures with you.

 

  1. Think about the sort of information you actually need from your customers.

    Do you really need to know their cat’s birthday or anniversary date just to issue a point? The most important thing to start with is that they are incentivised to keep coming back. Customers are more likely to share more personal information with you over time but it shouldn’t be a pre-requisite to participate in your programme.

 

  1. Consider the structure of your campaign.

    Offering discounts on future orders, member-only deals, and so on can make sense for many business particularly in the service sector, but can often be complex to run. In retail however, the ‘buy X, get Y free’ model (as used by coffee shops, nail bars, florists, ice cream bars, takeaways, street food operators, bookshops, and more) can easily be tailored to the specifics to your business. It also doesn’t need to mean a completely free giveaway as discounting can be used. For example, ‘Buy 5 coffees get 1 free’ to ‘Buy 6 treatments get 1 half price’.

 

  1. How will you measure success?

    Till sales and average order values will be an indicator of course, but what systems will you need in place to count how many points you are issuing? It is important to know how many cards you have given out. How many points have been issued, and how many rewards have been redeemed. Monitoring performance can help you tweak campaigns and better manage your business.

 

Implemented properly, a rewards program can foster true loyalty. Of course your product needs to be up to par and your service exceptional, but a well-considered and delivered rewards program can help encourage use and build valuable customer habits that will help grow your business.

 

Contributor

 

James Vanderzee

James Vanderzee is co-founder of Scrummy Club. The smarter alternative to paper loyalty cards for independent retail. Find out more at www.scrummy.club.

 

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