Loyal customers are valuable for any business – they buy more, recommend you to others and the cost of selling to them is low. It pays to encourage loyalty, and one way many small independent businesses do this is by means of loyalty schemes.
Whether your business is based on products or services, the basic precept is that your customers are at the core of your success or failure. You need to be seen to deliver good value and offer them a great buying experience.
The bottom line is that your business plan needs to include a strategy for retaining customers, and rewarding them for their loyalty is one way to go about it. Remember though, that no loyalty scheme or programme will ever replace excellent customer service and good communication as a way to keep your customers satisfied.
TYPES OF LOYALTY SCHEMES
Simple Card Scheme
The simplest scheme of all – still working successfully for many small independent businesses – is the classic “card stamp per purchase” type of reward. A customer is issued with a printed card, marked with six, or anywhere up to 10, squares, and receives a stamp in a square each time they visit the business and make a purchase. When all the squares are stamped, the customer receives a generous discount or freebie.
The drawback of this scheme is that cards typically get lost, smudged or damaged and therefore customers get frustrated. Also this scheme does not allow for the collection of any data about the customer, which is useful for marketing purposes and one of the bonuses of having a loyalty scheme in place.
The advantage is that it can be implemented easily, and suits any type of business, from hair salons to coffee bars, and bakeries to butchers.
Points Card Scheme
This is a slightly more sophisticated version of the one mentioned above, implemented at the point of sale. Customers sign up to receive a plastic card (similar to a credit card) which can be swiped at each transaction, and the amount involved translated into a certain number of points. When a set number of points have been accumulated the customer receives a reward of some type.
With this sort of scheme it’s wise to make the points:reward conversion system simple to understand, or you risk putting customers off rather than attracting them.
Mobile Loyalty Scheme
The modern trend – particularly in big brand retail chains – is to have a reward scheme managed by mobile app rather than plastic cards. This is undoubtedly a method preferred by the consumer, but small businesses may believe they are unable to afford the creation and management of their own mobile app.
In fact the opposite is true. There are dozens of companies offering customisable mobile apps for loyalty programmes for small business, and most are extremely inexpensive. They are, in fact, more economical than a card system – some costing as little as £1 a day.
Customers simply download a free app for your business and check in when they arrive on the premises. As the business owner/manager you can log in to a “dashboard” to get all sorts of useful analytics about your customers, and use push notifications to promote special events or discounts.
Here is a list of some loyalty app providers:
Last on our list (but by no means least!) is LoyalTap, which takes a different approach in that it offers a collective app for a community of local businesses. For example, you can band together as a set of independent retailers in a high street and offer collective loyalty points.
The digital revolution and proliferation of smart phone use has made it easier than ever to reward loyal customers. If you are not doing so, your business is losing out on customer retention and all its attendant benefits.