No matter where you shop these days, you’ll find businesses taking advantage of customer loyalty programs. Whether it’s a punch card at a food truck, a membership card at a grocery store, or a mobile app for a large ecommerce website, loyalty rewards programs are a proven way to increase customer loyalty and drive repeat purchases.
A loyalty program, also known as a rewards program, is a program that rewards customers for making repeated purchases from a business. Often, customers are rewarded with free items after a certain number of purchases, or discounts on certain items. Customer loyalty programs trace their origins as far back as the 17th century, when customers were given copper coins with each visit, which could be redeemed for free items at a future date. In the late 1900s, one of the most well-known types of rewards programs was launched; the frequent flyer program. The popularity of this program led to the loyalty cards and mobile apps you see today.
In the modern era of ecommerce and digital payments, rewards programs are more widespread than ever. Often, loyalty rewards programs will collect some form of customer data, which can include personal data, and can also track customer behaviour. The best rewards programs are easy to use, reward repeat business, and improve customer retention.
There are several benefits to having loyalty programs for small businesses. Loyalty programs improve your customer retention – working towards a reward or having an inherent discount on items will keep customers coming back again and again. And customers who are part of these programs will spend more than those who aren’t.
Customer referrals also increase with these programs. Rewards program members are more likely to refer a small business to friends and family, and customers referred by rewards program members have a higher retention rate.
Also, when programs are connected to an account, it is possible to track customer data such as purchase patterns. This can help businesses directly target consumers, giving discounts on items purchased most often. While this can be very beneficial for businesses, in the current environment of concern over data safety customers may be wary to share too much information.
The first thing you need to decide is what sort of loyalty program you want. Do you want a program that simply tallies purchases or one that records customer data? Depending on the type of small business you own, certain systems have more value than others. If you are running a food truck and want to reward customers with a free food item after a certain number of purchases, you probably don’t need a mobile app; a punch card system will do. But if you want your customers to be able to order from their phones, a mobile app is the way to go.
There are several different companies, such as Punchcard and Spendgo that can help you set up rewards programs. Some use directed e-mail marketing or mobile apps and can let you collect customer data as well. Having customer data not only gives you contact information but can also let you track purchase types, dates of purchase, frequency of visits, and other data.
There are several different options small businesses can use for their rewards programs.
Rewards programs can also offer different kinds of incentives for customers. Whether it is tallied by the number of purchases or a points system, the incentive must be worth the effort.
Loyalty rewards programs for small businesses are popular for many reasons, but mainly because they are effective. Loyalty programs do increase customer loyalty, which drives repeat purchases and customer references. Small businesses have been using them for years, but thanks to rewards program companies, a business of any size can create a program that best benefits it. Thank you for reading, and if you are a small business owner, I hope this helps you decide if a small business rewards program is right for you!