Global brands, airlines, and supermarket chains have mastered the art of running dynamic loyalty programs, with sign-up incentives and lucrative rewards that customers can’t seem to pass up. But while big businesses have managed these programs with ease, the same can’t always be said for their small business counterparts.
Small businesses have historically had trouble getting their loyalty programs off the ground. Although the number of loyalty memberships in the U.S. has more than doubled since 2000, a 2011 study by COLLOQUY found that most members are active in less than half the loyalty programs in which they are enrolled.
To find out how small business owners should launch their loyalty programs and encourage continued engagement, we spoke to eight experts in the field and asked what merchants need to do to promote.
1. Keep it simple. Customers aren’t going to want to sign up for a loyalty program if they can’t figure out how it works. In order to make their programs effective, businesses need to choose straightforward platforms that require very little explaining and leave no room for misinterpretation on the part of the consumer. The last thing a business wants to do is irritate customers with its loyalty program. (Valerie Trask, Punchkeeper)
2. Ask cashiers to promote the service. Introducing customers to new rewards programs is similar to introducing them to new products. Cashiers, waiters, and sales staffers need to understand how these programs work before they can start explaining the benefits to customers. Things like, “Can I assist you with anything else? Would you like to sign up for our rewards program?” should be a part of the common exchange between cashiers and customers. (Brian Mattingly, Welcomemat Services)
3. Choose one program, and stick with it. Loyalty is about patience and time. Depending on the industry, many businesses won’t know who their VIP guests are for 90 or even 180 days. During that time, businesses should continue promoting and developing their programs. Once a business decides to move away from paper punch cards and adopt a digital loyalty program, it needs to stick with it. If a company doesn’t take the decision to adopt a new program seriously, how can customers be expected to? (Rob Masri, Cardagin Networks)
4. Reward people for signing up. The first step can be the hardest when it comes to getting customers excited about a new loyalty program. One of the best ways to encourage customers to sign up is by offering an incentive for downloading the app or joining the program. These incentives don’t have to be large to be effective. Many businesses have found success just by offering introductory points in exchange for taking the time to visit their websites and join their rewards programs. (Sunil Saha, Perkville)
5. Encourage social sharing. Consumers maintain a huge influence over the behaviors of their friends online. Businesses that embrace this fact can take advantage of word of mouth marketing by asking their customers to tweet about their loyalty programs or post about their experiences on Facebook. As an added incentive, businesses can offer to reward their customers with bonus points when they share their check-ins and reviews with friends through social media. (Andy Steuer, Punchcard)
6. Make VIP customers feel special. Everyone likes to feel like they’re appreciated by the businesses they visit on a daily basis. Rewarding loyal customers with bonus points is a start, but it doesn’t end there. Businesses that use their rewards programs as a way to learn the names and spending habits of their most frequent customers can utilize this information to form deeper levels of engagement. When cashiers know the names and usual orders of their VIP guests, they increase the chances that those guests will continue visiting their businesses in the future. (Rob Bethge, Perka)
7. Don’t ask guests to change their behavior. People already have enough plastic cards in their wallets. The most successful loyalty programs are the ones that customers can use without changing their purchasing habits. The fewer steps a customer has to take to join and use a program, the better the chances that person will actually take advantage of the rewards. Businesses that choose programs that are built into existing credit cards don’t have to worry about asking their customers to adopt new behaviors when they reach the point of sale. (Stuart Kiely, Swipely)
8. Use data to build customer profiles. Loyalty programs that integrate with point of sale systems make it possible for businesses to build highly targeted marketing profiles for individual customers. In addition to spending patterns and visit histories, businesses should track which items their customers purchased, which servers or cashiers they interacted with, and any feedback they left about their visits. Restaurants can ultimately use this information to send targeted emails based on their customers’ tastes and histories. For example, a restaurant could send invitations to a wine tasting event only to those customers who ordered wine during previous visits. (Winston Bao Lord, Venga)
Stephanie Miles is an associate editor at Street Fight.
Image courtesy of Flickr user Nick J. Webb.