Benefits of customer loyalty programs

For my small business, as for many others, developing strategies to strengthen ties with regular customers is a priority. I know it is not a new idea, but a customer loyalty program remains a proven way to reward good customers and to give them a reason to do more business with your company.

If your small business has not yet considered introducing a customer loyalty program, now may be the time to start developing one. Here are four reasons I believe that a small business can benefit from a customer loyalty program.

A customer loyalty program can be easy to implement. While some businesses have complex customer loyalty programs that gather detailed information about customer transactions, your small business can start with a simple program, such as offering a free product or a discount after a set number of purchases (or a dollar value of purchases).

Although some experts dislike these programs, because they don't provide the business with much information about the customer, in my opinion, that shouldn't be an overriding concern for a small business. In fact, for a small business with limited resources, I believe the simplicity and low implementation costs of these programs, as well as the fact that customers often love them, are far more important considerations. Also, although these kinds of customer loyalty programs often are offered by retailers, if you are creative you may be able to design one for your non-retail business.

A customer loyalty program is a concrete way of recognizing your best customers and showing them you care. Even if you already shower attention on good customers, I believe that you can never reward them too much, so repeating the message one more time with a loyalty program targeted just at them can only be a good thing.

A customer loyalty program could increase your sales. One of the principle reasons to start a customer loyalty program is because you expect it to give your best customers an incentive to do more business with you. And a well-designed program should do that. If you roll out a customer loyalty program and it isn't paying off in higher sales, ask customers what changes you can make so that it is more valuable to them.

Customer loyalty programs don't have to be limited to individual businesses. Some malls have customer loyalty programs aimed at bringing consumers to their venue, irrespective of which stores they visit. Perhaps you could translate this concept into a local customer loyalty program. For example, if you would like to encourage customers in your area to shop locally, maybe you can partner with other local businesses to offer a more comprehensive customer loyalty program. The program could offer points for shopping at local businesses, with a certain number of points worth a coupon that can be used to purchase goods or services at any of the local firms that are participants.

If partnering with multiple businesses is too unwieldy, another alternative is to develop a customer loyalty program with a complementary business. For example, a restaurant that buys its desserts from a local bakery could introduce a program that offers customers loyalty rewards that can be used at either business.

Source: Develop a Loyalty Marketing Program - Strategic Partnerships Article - Inc.

Read more by S. H. Walick.

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