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This article is the second in our new series: Marketing during an economic downturn. Throughout this series, we will be sharing articles that aim to guide businesses through difficult economic terrain. Across a range of marketing topics, you’ll learn actionable tips for using proven tools to thrive through tough times. From handy product insights, to ideas and inspiration, this series will be a valuable resource to any business looking to meet today’s challenges head on.
So you’re running a business during an economic downturn. Now what?
As a business owner, you have regular expenses that continue to rise. And though some of your regular customers are still supporting your business, news about rising interest rates and inflation means everyone is a little bit on edge. It’s natural to feel the pressure under these circumstances.
In economically challenging times, customer loyalty takes on an even greater importance in your business strategy. Any type of business can benefit from introducing a Loyalty program – from hair and beauty salons to retailers and hospitality businesses. Each business can customise their program to suit their customers’ needs and preferences. Read on for a refresher on what tools are available for your business and tips on how to implement one that works both online and in-store.
How does a loyalty program work?
In general, a loyalty program is any system that offers rewards or incentives to customers who purchase from your business. Usually this reward is in the form of points that are accumulated and can be redeemed at your business. The paper punch-card is one simple example of traditional loyalty programs (e.g. get your tenth coffee for free). But today the options for integrated and omnichannel loyalty programs are more advanced.
Enrolling a new customer
Square Loyalty connects directly with your Square Point of Sale system and your existing Customer Directory. Any customer who signs up to your loyalty program will have this saved on their customer profile, along with other important information.
There are a couple of ways a customer can sign up for your loyalty program with Square. In a regular in-person transaction, you would process the sale as normal on your POS. Then, once the customer has passed the receipt screen, they will see the loyalty screen on your POS. All they need to do is enter their mobile number to be signed up and start accruing points. A text message sent to their mobile number will confirm the successful enrolment.
The other way to sign up a customer to your loyalty program is manually through your Customer Directory from the Square Dashboard or Square POS app. Just find or create the customer profile, then add their mobile number. They’ll be signed up right away.
Letting customers accrue points
To keep things simple, Square Loyalty automatically accrues loyalty points for your customer if they pay by card. Your customer’s loyalty mobile phone number is linked with their payment card automatically. When a customer comes back and uses the same payment card to pay for the transaction, Loyalty automatically accrues points based on the linked loyalty mobile phone number.
You can also opt to show your customers a screen during checkout, inviting them to sign in with their mobile number to receive loyalty points on their purchase (or to sign up if they haven’t yet). This means customers can get their points no matter how they choose to pay.
Why focus on loyalty in an economic downturn?
Today’s customers need reasons to be loyal to a business. In this still-pertinent Harvard Business Review article, the authors categorise customers into four groups in the context of an economic downturn: 1. The slam-on-the-brakes customer 2. The pained but patient customer, 2. The comfortably well-off customer, and 4. The live-for-today customer; all very different in their psychology and financial circumstances.
It’s important to remember that not every customer will behave in the same way, and that different customer groups are seeking value in different ways.
Customers are hungry for value
Think about how your products or services are perceived by your customers. Are they viewed as necessary purchases or justifiable treats in a challenging economy? Or would your products start to fall into the luxury category for customers looking to scale back their spending? This information can be used to shape your loyalty program and encourage your customers to use it.
Value includes both tangible and intangible elements, and can’t be easily quantified. This is where rewarding loyalty becomes extremely important. What can be a small cost to your business (such as a discount after a certain value has been reached) can often be perceived as a valuable win to an individual customer. This sets in motion a virtuous cycle where repeat visits become more valuable, and more frequent.
The fact that your business offers a loyalty program could be the thing that sets you apart from your competitors and gets customers through the door. And with Square Loyalty pricing starting from just $49 per month, it’s a cost-effective strategy to help you through this challenging period.
Loyalty programs reward customers both online and in-store
Good news if your business also sells online. Loyalty programs can now make the online shopping experience just as rewarding as the in-store experience.
While more traditional loyalty programs offered by some businesses only count if the customer came in to visit a brick and mortar location, Square Loyalty bridges the gap and allows customers to accrue points no matter where they shop from.
Customers can redeem or earn rewards for transactions completed through your Square Online website. When completing a transaction on your business’ website, the customer will need to enter in their mobile phone number to apply any accrued rewards to their transaction. Try adding reminders to your marketing emails or on your website to further remind customers that they can accrue points when they click to purchase.
In any economic conditions, loyalty programs can be both simple and rewarding. If you’re looking for a smart way to provide value while improving your customer loyalty and retention, consider a loyalty program that works seamlessly alongside your POS.
This article is for informational purposes only and does not constitute professional advice. For specific advice applicable to your business, please contact a professional.