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Customer Loyalty Programs for Small Businesses

Written by 
Brad Davis
 - 
February 4, 2019

Customer loyalty programs are a cost-effective customer retention and acquisition tool that are proven to increase sales, attract new customers and increase the amount spent per transaction

That's why customer loyalty programs for small businesses are especially important, as having a strong database of loyal customers can provide the stability and steady revenue needed to ensure a small business thrives.

Implementing a customer rewards program can help small businesses to build up their customer database and also build great relationships with their customers by rewarded for their loyalty. It's a win-win situation.

Most often than not, people enjoy supporting small businesses and contributing to their local economy. After all, purchases made at local independent businesses generate nearly four times more wealth for the local economy than the same purchase made at a large chain store.

Whether it’s your local coffee shop, hairdresser or burger joint, customer loyalty programs for small businesses are an unrivalled method for increasing repeat visitation and ensuring loyal customers feel valued.

Given that a 2% rise in customer retention has the same effect as slicing 10% off your business’s costs, it’s important to ensure you have a solid base of satisfied customers who will continually choose you over your competitors.

With that in mind, here are some reasons why a customer loyalty program is beneficial for your small business.

1 – Customer Retention

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Knowing who your demographic is and what they want is key to creating a successful rewards program for small business, as it helps you determine who your most loyal customers are and the best way to reward them.

If your small business is a café, then obviously the most beneficial offer for your customers is the promise of getting every 7th coffee free, or a free dessert every time they spend $50 of accumulated transactions in your coffee shop.

This encourages customer retention, while offering customers a free coffee upon downloading the loyalty card app helps expand your customer base and immediately gives them a good impression of your business from the very first experience, which brings us to our next point…

2 – People Talk!

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Whether it’s high school gossip, holiday destinations or exchanging terrible customer service horror stories, people like to review things amongst their friends. So given that your small business is inevitably going to be the topic of discussion amongst locals, make sure it’s a positive discussion!

Rewards programs for small businesses can help provide your customers an answer to the question, “What’s in it for me?”. A whopping 92% of customers trust peer reviews while only 14% trust advertising, so it’s crucial that your existing repeat customers are happy with your product and telling their friends and family about it.

3 – Upselling Opportunities

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Assuming that your loyalty program is geared the right way, successful customer loyalty programs encourage upselling and cross-selling opportunities amongst your existing customer base.

For example, “25% off hair colouring after your third haircut” …not only does this encourage the customer to get three haircuts at your salon, but upon the fourth appointment it encourages them to book in for a full trim and colouring service, which ultimately increases the profitability of that customer to your business.

An important factor to keep in mind when creating a loyalty program for your business is that the customer needs to feel like they are missing out if they don’t download the app and start using it.

By offering rewards such as “$5 off your first order” or “free coffee with first purchase”, you are providing an incentive for the customer to join your businesses loyalty program, meanwhile encouraging the customer to make a purchase in order to access the reward / discount.

To wrap up, customer loyalty programs for small business allow you to get “bang for your buck”, as the rewards on your end are far greater than the cost of implementing a rewards program, and your loyal customers feel valued and see reason to keep coming back. Everyone wins!

Want to discuss how a customer loyalty program can work for your small business? Whether you have a coffee shop, restaurant, hair salon, or dog washing business - we're here to help you create and implement a successful loyalty solution for your business. Talk to us today.

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