Impactful Customer Loyalty Programs for Small Business
- Posted on March 8, 2022 by Robert
- Reading time about 5 minutes
According to a statistic, it costs five times as much to attract a new customer than to keep the existing one! Every small business has two major goals in the inception phase. One is to have enough customers onboarded and another one is to stay within budget, that’s the reason why small businesses should opt for a customer loyalty program.
To your surprise, loyalty program software can actually be your effective weapon in retaining customers. As per the Customer Advocacy Report, 40 percent of customers are more likely to buy more often from brands that reward loyalty. In this article, we will study what’s a customer loyalty program and the best suited loyalty program for small businesses.
Understanding Customer Loyalty Programs
The definition is quite simple, a customer loyalty program is a complete system where a business offers perks and rewards to the associated consumers who’re making frequent purchases. It is a tactic of a strategy that I used to encourage the customers to make purchases from the same brand. Loyalty programs can be various kinds including the refer-a-friend program which are offering customers a discount if their friend signs or make a purchase, the loyalty rewards programs offer free perks and discounts to the customers.
Why’s it Important to have a Customer Loyalty Program in place?
Now that we have understood what exactly dos a customer loyalty program means, according to a study by Accenture, customers who are members of a certain loyalty program typically spend on average 12 percent to 18 percent more than a regular customer who isn’t a part. Here’s why it is an imperative aspect and small businesses must invest in having a strategic loyalty program in place. Check out a few other benefits to look up to-
- Improving on retaining customers
- Encouraging repeat business
- Increasing customer lifetime value
- Establishing a better communication channel and building a stronger relationship with your customers
- Letting the customers feel more satisfied with the brand
- Providing qualities that differentiate you from your competitors
- Boosting revenue in the long run
Types of Loyalty Programs for Small Businesses
Customer loyalty software is not wrapped under bushes, they’re widely used and accepted by the customers. There are various types of customer loyalty programs that can work on different models and offer different sorts of discounts for the customers. Let’s check out the five most impactful types of loyalty programs for small businesses-
These are one of the most common types of loyalty programs, preferred by most of brands. It works on a model of rewarding customers on every transaction they make with your brand. These reward points can further be redeemed to get a discount on their next purchase or sometimes on a special occasion. This sort of reward program is basically built for encouraging repeat sales.
- Mission-driven loyalty programs
Not every loyalty program focuses on providing its customers with perks like discounts and rewards. While a mission-driven loyalty program means that your customers should feel like their purchase or use of your product helps to create a difference and improve in their regular lives. For instance, brands are getting started with a mission-based loyalty program wherein they’re asking customers to help the environment and plant a tree. These programs are the smartest ways to create a positive brand impression and make customers feel like they’re doing something unique for the goodness of society and the world.
- Subscription-based loyalty programs
Ever heard of the word subscriber’s discount? You must have! Subscription-based programs are the ones that offer special discounts and perks to the customers who have subscribed to a particular program. Not just discounts, here customers can also avail exclusive services and VIP perks. Small businesses can benefit from this as they can target their quickly accessible services to the customers and make money through selling subscriptions. This can both increase customer footfall and also have a boost in revenue right from the beginning.
- Community loyalty programs
As humans, we always love to connect with like-minded people and that is exactly what a community loyalty program offers. Well, these programs do not offer tangible benefits like heavy discounts, perks, etc. but here a brand can design a community with a common communication channel wherein people having similar interests can gel up, know each other, share experiences, and pretty much more. Why’s it useful? It’s because people can connect with others having a similar group of interests and can have common topics to start a discussion instantly.
- Referral loyalty programs
Word of mouth marketing has been the typical way to share a positive word about any brand, though it is to date the most effective way to connect with customers and build better brand value. So, refer a friend loyalty program works on a model of spreading a brand’s positive experience with the friends and family and letting them sign up with the brand. This is quite a successful option as both referral and the already associated customer will get joining perks and rewards respectively on either successful signup or the referral’s first purchase. Many leading brands have already implemented the same and making use of this sort of loyalty program.
Getting started with a customer loyalty program is a perfect investment for a small business as they initially require more customers to be onboarded. Most of the leading brands are making use of customer retention software to get their brand the right customer base and better value. The first step to start should be working out the strategy, planning on what type of loyalty program would suit well, and in the end finding the most accurate or best-suited loyalty program provider who can cater to customer’s requirements and provide exactly what they require. Still in splits? Fins a loyalty solution provider and get free demo of the system to make sure that works well with your small business