Disclaimer: Nothing in this article should be construed as legal or financial advice. Please always consult a knowledgeable professional advisor.
A customer loyalty programme drives repeat purchases and prompts existing customers to choose your company over competitors. As a business owner, you work hard to make sure your customers get the best experience possible. You’ve hired the right people, your customer service is great, and you have an amazing product. You’ve covered the basics for turning a first-time visitor into a regular customer.
Ready to take your business to the next level? Add a customer loyalty programme to reward your loyal fans and keep them coming back.
What is a customer loyalty programme?
A customer loyalty programme rewards customers for shopping with you frequently. It is a great way to engage with your regulars and make them feel valued—if the rewards are good. The goal is to give them a reason to come back. But you can also use one to acquire new customers.
What are the benefits of a customer loyalty program?
78 percent of consumers say they are more likely to choose a business that has a digital loyalty program over one that does not, according to Visa’s report on the Digital Transformation of SMBs. And 65 percent of consumers surveyed said they look to see if a business has a loyalty programme before going to a shop, visiting a restaurant, or trying out a service. This means when you introduce a customer loyalty programme, your current customers aren’t the only people you’re reaching.
Perhaps the most important benefit of a loyalty scheme is that loyal customers buy more. A report by Bain & Company reveals that not only do they spend more and generate larger transactions, but repeat customers also refer more people and bring in more business. And they are more willing to expand their purchasing from you into new categories, like trying your other products. This being the case, customer loyalty on the internet is a key driver of long-term profitability.
And once you have it, customer loyalty should not be taken for granted. 50 percent of customers say they’ve left a brand they were once loyal to because a competitor was a better fit for their needs. So, a customer loyalty programme can not only help you earn a loyal customer base, but also keep them over time.
Avionos reports that 78 percent of consumers prefer to shop with retailers offering personalised experiences. A loyalty programme helps to make customer experiences feel more personalised, as they can easily track their previous purchases and feel connected to their own customer journey with your business.
Despite customer preference, only 1 in 5 small businesses surveyed have a customer loyalty programme. Grocery shops and supermarkets are more likely to have a scheme in place, while the majority of retailers, restaurants, and services don’t provide an additional incentive for doing business with them.
However, nearly 80 percent of small businesses with a customer loyalty programme say they’ve seen a positive impact on average ticket size, repeat customers, and revenue since introducing rewards. Analysis of customers enrolled in Square Loyalty shows that they spend 37 percent more after they join than they did before.
So, what are you waiting for?
Go digital
You know the scene: The person behind the counter hands the customer a business-card size piece of paper with a stamp or initials in one of the boxes. “Bring this in next time,” they say to the customer.
But how likely is it that the loyalty card makes its way back to the shop?
It’s more likely to get mixed up with other business cards, buried at the bottom of a purse, or thrown out with receipts. There’s also the chance that the customer returns with multiple cards that have only been marked once and you have to tally visits (heavy sigh). They might also feel less accustomed to carrying physical reward cards as we emerge from pandemic restrictions.
We’ve all become used to one-click solutions, after all.
If you’re looking for an alternative, try a digital customer loyalty programme. Ninety per cent of consumers prefer a digitally based customer reward programme over paper cards, according to Visa’s study.
One benefit is the time you save. Going digital means less time searching for and punching cards and more time actively engaging with your customers. And thanks to loyalty insights, you’ll learn more about the people who shop with you. The Global Convenience Store Focus reported on 2020 trends, stating that, “to transform your program into an effective revenue-generating tool, you need to capture the right customer data and have the capability to translate the data into actionable insights.” Data-driven marketing increases personalisation in loyalty programmes and allows you to include rewards that are more relevant to individual members.
Getting set up with a digital programme doesn’t take a ton of time.
To get started, find a programme that integrates with your POS and customer directory. Then work on building customer loyalty with a scheme that will best incentivise your customers. Will they earn customer loyalty points based on the number of visits or amount of money spent, or earn points based on specific items?
What will they receive for shopping with you consistently? A discount? A free item? You have to decide which customer loyalty benefits you want to offer and how you want the customer to engage with the program. When and how you reward your customers is up to you, but increasing customer loyalty is sure to pay off.
The final step is to promote your programme. If you have a mailing list, send a blast letting customers know about the new incentives. And because the majority of consumers do online research before shopping, make sure your website and social media platforms highlight the benefits of doing business with you and how you are rewarding loyal customers. Square Loyalty can work with your website through eCommerce integrations and help to expand online sales and improve in-person customer experiences. Implementing your customer loyalty program into each of your marketing strategies will help you run your business more efficiently and create loyal, happy customers.
Remember when contacting customers to make sure you always adhere to the relevant rules around data protection, GDPR and ePrivacy.