What Small Businesses Can Learn from Big Business About Customer Loyalty Programs
Below see how your small business matches up and learn the advantages of creating a customer loyalty program.
The next time you see a friend use one credit card specifically for the points, there’s a customer loyalty program working like a charm. What can small businesses learn from credit cards, airlines, hotel chains and retailers who have developed strong customer loyalty programs? Quite a lot it turns out.
Think about how to go beyond your core businesses to add value to customers’ lives. For example, a dry cleaner can offer a loyalty program where customers get their 10th shirt dry cleaned for free. Any retail environment, whether it is a restaurant, a bakery, or a barber shop, can offer similar programs. Getting started is easy: All you need is a card and a specific stamp that can’t be easily copied.
Other businesses, like hotel chains, offer points to exchange for value on a future purchase. You may join an airline loyalty program that gives the 8th flight for free in any given year. But such loyalty programs go beyond a simple formula and are frequently paired with value added services (like free luggage, free WiFi at airports, access to airport lounges, exclusive access to sales, etc.) that build loyalty and create a stickiness around their service.
Every business has competitors and there are many ways that you can make your business stand out from the rest. One easy way to do this is to institute a loyalty program that provides real value for your customers. This can include practical things that they can use, rather than giving them a key-chain that they’ll likely throw away. Services such as Belly Card make it easier to digitally manage your loyalty program. You can use this tool to track data about how and when they choose to redeem their rewards.
There are also other ways that large retailers use loyalty programs with great success. Amazon generates plenty of extra income from their Amazon Prime loyalty program. While signing up for Amazon Prime costs $99 per year, if used a dozen times it will pay for itself as users get “free” shipping with each purchase. Using Amazon Prime becomes so easy for shoppers that it then quickly becomes addictive. Soon, customers will use Amazon Prime for tons of purchases.
Small businesses can also use this strategy. The same dry cleaner mentioned earlier can sell an inexpensive membership that gives customers 10% off every purchase and a free local delivery upon sign-up. Once customers have already bought in, this program will encourage users to return to the dry cleaner where they can forever take advantage of their discount.
Setting up a loyalty program will surely make your business stand out. You will be able to rise above your competition easily. Before rushing to set up your program, though, it is essential to think creatively about what value you can add for your customers that won’t cost you much but is something they will appreciate. Remember, the best customers are repeat customers, so always keep them coming back for more!