6 Customer Loyalty Programs For Small Businesses

Customer loyalty programs for small business are an inexpensive way to increase sales and customer retention. A loyalty program also can prevent customers from visiting your competition while increasing the number of purchases your average customer makes each year. This means the time and monetary investment pay off significantly in the form of greater profits and fewer lost customers.

You can develop a loyalty program that suits your company and budget. As a small business owner, you might not have the resources to create an app, but a basic system could be right up your alley. Here are six customer reward programs you can use to build a better relationship with your customers while improving your business sales.

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1. Make a Punch Card

One of the most basic loyalty program models is the punch card for businesses. This is effective in salons and restaurants to encourage customers to return a certain number of times. You determine if the reward is based on buying multiples of a single item or on the dollar amount spent during each visit. For example, the punch card might offer a free sub for every 10 sandwiches a customer buys or a $15 discount on total services at a nail spa.

This option is basic because you only need to print out the cards to launch and manage your customer loyalty program. There isn't any software to maintain, and you can always print more cards when you run out. Plus, it's up to your customers to keep track of their rewards cards, minimizing your work.

2. Create a Customized Mobile App

If you're looking for a more advanced loyalty program for small business, consider investing in a customized mobile app. You might think that making an app for your business is an expensive undertaking that's beyond the scope of your budget. Fear not! There are many programs to help you make an app that looks as if you had it custom made for your business. Best of all is the fact that you don't have to have coding knowledge to make an app.

App makers use a template format that enables you to put in your own branding, artwork, and business-specific information. You enter the relevant information into the fields, arrange them as you like, and once you're satisfied with how it looks, the program turns everything into a working app for iOS and Android. You can put the app on the App Store and Google Play for your customers to download.

Another benefit to using a business app creator is the fact that you can add in a loyalty program that tracks your customer's purchases for future rewards. It simplifies your reward and loyalty programs by putting them into one app. You can see examples of this with brands like Starbucks or Chipotle. Customers can see their rewards points, opt for rewards that aren't monetary perks (such as merchandise or free items), and learn more about your business hours and services.

3. Offer Scannable Membership Cards

The third option to consider as part of your loyal customer program is the hybrid model, which combines customer cards with digital membership benefits. Loyalty or rewards cards give the customer a physical reminder that they're part of a rewards program at their favorite retail establishment. The cards work via scan or swipe and record purchase information through the point-of-sale system.

The card can also be linked to the customer's phone number, which enables them to use their card when they can't find it. It's a convenience for the customer and business alike because the cards generate information that's tracked in a database. Panera is an enterprise example of a company that uses this. You can submit your phone number or your Panera card when you make a purchase, and the cashier will let you know if you have any rewards available.

Panera also does a good job of using segmentation in its rewards. Customers that buy breakfast foods and pastries will typically earn coffee and pastry-based rewards. Meanwhile, customers that mostly buy lunch items will receive lunch perks. Customers are more likely to use these rewards because they are relevant to their interests.

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4. Come Up With a “Members Only” Option

The whole purpose of customer loyalty programs for small businesses is to make customers feel special and encourage them to engage with your brand because you made them feel good. Customers like being part of an exclusive club. It makes them feel like they have an "in" with the business and get an advantage over people who aren't. This type of loyalty program is a little more refined than an email blast because you want to reward the people who signed up for the program with special discounts and incentives that aren't available through any other reward program.

You have the option to charge a fee or give away membership for free, but you need to be able to provide benefits that are commensurate with either option. Some members-only programs charge a fee that encourages customers to come in and shop to earn discounts. The idea is to encourage a customer to "get their money back" and enjoy the discounts after they've recovered their initial outlay. If the program is free, you can offer discounts that aren't put out into general circulation and are only given to those who made the effort to sign up.

If you are investing in customizable rewards, consider adding an advanced tier for different levels of customers. Start with tiers that reward customers you see each week or every day, giving them the most rewards. Then, you can reward secondary and tertiary customers you see monthly or a few times per year. This way different members get different perks.

5. Send Special Rewards via Email

It used to be that you would send out physical mailers with a coupon to a broad demographic of people and hope that you'd get a reasonable response rate. You could target people directly provided they gave you an address in the first place, but you still incurred an expense that may or may not have generated a rate of return. It's still a valid method of increasing footfall to your business, but it's best used when trying to increase your customer base instead of rewarding loyal customers.

Email makes a lot more sense and costs less than a physical mailer campaign when it comes to rewarding customers. Encourage customers to sign up for news and special offers passively and actively. Put out a sign-up sheet or book with a sign that tells people to leave an email address for special deals and have employees mention the program when they ring up a customer.

Be consistent with your rewards program as it encourages people to come in and use the special offer. Customers are less likely to hold onto an offer until just before it expires when they know there's another one around the corner. You can send exclusive rewards, such as birthday items and special sales, to customers within your loyalty email list. Email is another way to segment your customers and offer different rewards to different customer tiers. Plus, your customers just need to access their email accounts to use the rewards, making the system easy to use.

As your business grows, consider looking for more advanced email marketing options for your loyalty program. Some systems will autosegment customers and send triggered emails based on behavior, making the process less hands-on and freeing up time for you and your marketing team.

6. Present Customers With a Foursquare or Swarm Reward

If you don't want to build your own reward system, you can use companies that offer rewards for customers. Foursquare, Swarm, and Yelp all allow you to offer rewards for checking in. These can be as small as a taste of an item or as big as a discount on the whole purchase. Look into claiming your business on these apps and adding rewards for the people who use them.

One of the biggest challenges of using a third-party reward system is keeping up with which trends customers use. For example, Rakuten is doing a big push right now to get customers with its cashback model. Customers using this system could grow significantly in the next few months.

Look Into Popular Loyalty Program Software

If you want to launch a digital loyalty program but don't have the time to develop and maintain an app, consider using the current loyalty software that is on the market. With loyalty programs software, you can choose app templates, set rewards goals, and customize the interface with your company's branding. It will look like your own loyalty app without as much financial investment.
A few software tools to try include CandyBar, Social Spiral, SpotOn, and Perkville. You can see which of these tools offers the features you want at a price that works for your budget.

You're in control when it comes to creating a customer loyalty program. The best loyalty program is the one that works for your business and inspires customers to return to your company. Be flexible, listen to customer feedback, and be willing to tailor the program as needed in order to keep it relevant to your business and customers. Consider the criteria, style, and tools mentioned throughout this article to guide your decisions.

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