Customer Loyalty Programs: A Must-Have Retention Strategy
Stolim
If you're considering a loyalty program for your small business, here are three high- and low-tech options for implementing one.
Rewards and discount programs
A rewards program is arguably one of the most popular types of loyalty initiatives today's businesses offer. They typically work by awarding a coupon, free item or other incentive to customers who have earned a certain number of points by shopping there.
"Businesses should absolutely offer rewards and discount programs to customers," McCarter said. "Rewards and discount programs give customers more reason to come back again, especially in the competitive retail and services markets."
Direct mailers
For a simple, low-tech loyalty program, direct mailer coupons can be a great way to get local customers into your store. However, for the program to succeed, you need to make sure you have a strategic, personalized mailing system.
"Target a specific customer demographic with a tangible product and message based on a specific element on the individual's life," said Brian Wirth, digital marketing strategist at pizza franchise Hungry Howie's.
General nontargeted direct mailers have proven to be increasingly less effective as consumers have other ways to engage with business. However, targeted mailings to VIP clients with special offers still can be effective, according to McCarter.
Card-linked offers
Card-linked offers – for example, cash back for making a purchase with a specific vendor – are a convenient way to offer discounts, said Silvio Tavares, president and CEO of payment card industry group The CardLinx Association.
"You can personalize your offers for consumers based on their spending and websites they've visited in the past," Tavares said. "You now have the ability to measure [the effectiveness of] an ad and see if it led to a purchase on that customer's card."
While card-linked offers can be effective, work is required on behalf of the business to ensure the consumer is aware of the offer, said McCarter. Consumers often only find out about the discount after they receive their bill, and thus the value of using a discount to drive a consumer to the business isn't fully realized.
Rewards and discount programs
A rewards program is arguably one of the most popular types of loyalty initiatives today's businesses offer. They typically work by awarding a coupon, free item or other incentive to customers who have earned a certain number of points by shopping there.
"Businesses should absolutely offer rewards and discount programs to customers," McCarter said. "Rewards and discount programs give customers more reason to come back again, especially in the competitive retail and services markets."
Direct mailers
For a simple, low-tech loyalty program, direct mailer coupons can be a great way to get local customers into your store. However, for the program to succeed, you need to make sure you have a strategic, personalized mailing system.
"Target a specific customer demographic with a tangible product and message based on a specific element on the individual's life," said Brian Wirth, digital marketing strategist at pizza franchise Hungry Howie's.
General nontargeted direct mailers have proven to be increasingly less effective as consumers have other ways to engage with business. However, targeted mailings to VIP clients with special offers still can be effective, according to McCarter.
Card-linked offers
Card-linked offers – for example, cash back for making a purchase with a specific vendor – are a convenient way to offer discounts, said Silvio Tavares, president and CEO of payment card industry group The CardLinx Association.
"You can personalize your offers for consumers based on their spending and websites they've visited in the past," Tavares said. "You now have the ability to measure [the effectiveness of] an ad and see if it led to a purchase on that customer's card."
While card-linked offers can be effective, work is required on behalf of the business to ensure the consumer is aware of the offer, said McCarter. Consumers often only find out about the discount after they receive their bill, and thus the value of using a discount to drive a consumer to the business isn't fully realized.