Referrals and recommendations, brand ambassadors, loyal customers—they’re all gold for small businesses.
Our clients are always working to grow and cultivate a loyal following. When they ask me how, I often suggest developing a reward system. It’s a plan that can turn good customers and clients into great ones! Loyalty programs work, and they can be applied to both business-to-business and business-to-customer interactions.
No longer limited to the physical punch card—although that’s still quite an effective program—websites and apps enable small businesses to encourage loyalty, market more frequently to customers, and not have to spend a lot of money to do it.
Rewarding frequent purchasers.
The traditional paper punch card: As mentioned, this tried and true method is still effective. When a customer returns and makes a purchase, a hole is punched in the card. Reach a certain number of punches and the customer is rewarded with something for free or a gift card.
The online punch card: App versions of the paper punch card are popular because they’re less likely to be misplaced, and do not have to be limited to the number of holes that will fit on a card. Here, the punches can be points, and you can customize and tier how points can be redeemed.
Plus, apps enable you to further engage with your customers. For example, when they check their point balance you can message them about special offers, upcoming sales or featured products. Apps include Square and Punchh.
For both, the reward doesn’t have to be expensive, they just have to feel like the customer is getting something extra.
A reward card for “members only”
It’s similar to the frequent purchase idea with a twist—these are the customers that are “on the inside” and are getting added value that others do not. Each time they visit your business and show the card, they get a perk or money off their purchase. Often, membership requires a customer to provide an email—and this will enable you to enhance a marketing relationship.
Rewards for “infrequent” purchases, too
Certain retailers are frequented by customers more often than others because of their product and price point—like food or clothing, for example. What about when you offer goods or services that are more expensive and less often used? You can still reward your customers.
If for example, you run a copier business, include a coupon for the next copy job, or offer for free something you would normally upcharge, like color copying or heavier bond paper. The beauty is, while they may not come by as often as the coffee shop next door, you’re still building customer loyalty.
One thing NOT to do: Incentivize for reviews
To generate traffic– both online and physically to your store–one of the best ways is to ask customers to post reviews through social media sites. It can boost online search performance and help you better understand your customers. But, what you should not do is offer rewards for reviews—this includes discounts.
By law, whether it’s a blog post, testimonial, review or endorsement, it must be explicitly stated if anyone is being paid for their opinion. Additionally, it’s illegal to incentivize reviews even if there’s no requirement that the review should be positive.
We see paid endorsements all the time, but for a small businesses, this can backfire and seem insincere or like spam.
If you’re considering adding a loyalty or rewards program for your business, you’ll want to be certain your accounting of these programs is managed well and accurately. If you have questions about how to integrate a loyalty program into your business, we can help. Contact us today.
Additional sources:
“Loyalty Programs for Small Businesses That Won’t Break the Bank” by Keith Cawley www.allbusiness.com
“Requesting Customers to Review Your Business? Don’t Incentivize.” by Migs Bassig www.reviewtrackers.com
