Today's businesses are always looking for new ways to attract new customers and retain the clients they already rely on. In the current landscape, it's not enough to simply offer discounts and specials every once in a while. Consumers are looking for more perks from their retailers and vendors, and are flocking to those that are offering ongoing benefits, such as those included in a loyalty program.
According to the 2013 COLLOQUY Loyalty Census, loyalty programs are growing in popularity, with more than 25 percent growth in programs appearing within the past two years. The study also noted that besides providing a strategy to keep individuals coming back and encouraging new shoppers to make purchases, loyalty programs can also reveal insight about customer behavior. GetOne Rewards CEO Randy McCoy said that digital loyalty programs are shifting the industry.
"Merchants are capitalizing on the real-time and geo-targeting capabilities of cloud-based loyalty platforms," McCoy said. "Incentives and rewards are the foundation of any loyalty program, but retaining customers and understanding why new ones are entering your store can be the difference between surviving and scaling a business."
However, before companies can utilize information gained from a loyalty program, they have to establish a successful one. Here are a few tips to help you get started:
1. Consider what rewards will be offered
Intuit contributor Ellen Lee suggested carefully selecting the awards being offered through the program. Incentives can encourage customers to return to the brick-and-mortar location or website, but should be beneficial for the business as well. Instead of just giving away freebies and hoping shoppers will keep the reward in mind, make them work for it. Provide a gift or discount after a certain number of visits or when a purchase reaches a specific dollar amount.
2. Start with the basics - Punch card
One of the easiest, and potentially the most advantageous routes to go with a loyalty program is offering a punch card. You'd be hard pressed to find an individual that doesn't have at least one of these cards in their wallet from a local business or chain. Although a number of groups offer them, it doesn't mean this approach isn't effective. While the U.S. Small Business Administration noted that this strategy counts on shoppers keeping the cards with them, if the incentive is attractive enough, individuals will hold onto them. Additionally, consumers will return to a store if it means another notch on their loyalty card. Some stores have even seen increased purchases with loyalty cards. If a person only has 2 punches left before achieving their goal, they must just buy the two items required to get there, boosting sales opportunities.
3. Make the rewards known
Once the loyalty program has been established, staff and employees should be briefed on the details, what their responsibilities are and what the strategy means for the business. This will ensure that the rollout goes smoothly.