Whether it’s a punch card that encourages diners to come back to your restaurant or a reward program that gives a little cash back after a buyer spends a certain amount of money at your pop up shop, a customer loyalty program for small business should always be in the back of your mind.
A great way to deepen your engagement with current and prospective customers is through a loyalty rewards program. According to consumer research, customers that participate in loyalty programs generate up to 18% more revenue than do non-participants. Additionally, 71% of consumers report that loyalty programs are a meaningful part of their relationships with the businesses they frequent. This especially applies to Gen Z and Millennials, who have a higher rate of influence (66%) than Baby Boomers (58%).
Implementing a loyalty program requires a well thought out plan to ensure its success. Presenting realistic rewards to your frequent customers is only one aspect of a loyalty program; you also want to use these rewards to draw in new business in order to develop new, long-lasting customer relationships. As you look to establish a loyalty program, there are a few key points to consider in order to ensure your program’s success.
Establishing What You Seek to Accomplish with Your Loyalty Program
A vital component that drives many successful loyalty programs is developing a deep understanding of what you hope to accomplish through your program. The benefits of loyalty programs can differ wildly from business-to-business and industry-to-industry, so this step will require you to take an in-depth look into every aspect of your business. This allows you to align your rewards with your business offerings and historic data, which allows you to avoid giving back too much or too little.
The creation of your loyalty program requires you to determine a compelling, competitive, yet always realistic, incentive for your customers. These incentives must work to generate loyal customers, who typically contribute a higher percentage of your revenue than non-loyal clients. This works to your advantage, as your customers will be less likely to seek out a competitor for similar products while giving you the benefits of broader customer retention. This, in turn, gives you customer growth and free advertising through word of mouth, resulting in increased revenues.
This does bring up one additional item you need to address when developing your customer loyalty program for small business: the establishment of your branding voice. It is too easy for those spreading the word to add embellishments around the products and services you actually offer and may lead to inadvertent overpromising or a general lack of accuracy around your product offerings. Developing an accurate, easy to remember branding philosophy, whether you run a food truck or a jewelry boutique, will reduce any misrepresentations or promises that you cannot keep. Regardless of what your branding message is, it should be engaging and fit into how your customer loyalty program for small business operates.
Understanding Your Customer Loyalty Program for Small Business Options
Perhaps just as important as setting goals around your customer loyalty program for small business is the methodology behind how it will run. When developing your loyalty system, you must keep in mind the simplicity of enrollment for your customers as well as the ease of reward redemption. You will also need to have knowledge about what your audience will be comfortable with when selecting your program options. Is your clientele more apt to use technology, or are you entertaining an older demographic that would better appreciate a manual option?
While the customizations available to you in establishing a customer loyalty program for small business are nearly limitless, you will need to begin by selecting a foundation from which to build. Here are the more common options available to you for managing your loyalty rewards program.
- Punch cards. This low-tech option is very cost-effective since it does not require any additional equipment, outside of a hole punch, to operate. This basic approach is easily understood by most customers. The negatives of this approach include the inability to collect useful data about your customers, as well as the complications brought about by forgotten, lost, or stolen punch cards.
- Swipe cards. These are also simple and easy to use as they will often mimic credit or debit card use. Swipe cards and gift cards present an opportunity for data mining your customer base, which allows you to better set rewards and specials based on collected data. Since these cards can be tied to a POS system, a cashier can look up the customer by their registration information, such as a phone number, making a forgotten or lost card a non-issue. The initial cost is a bit higher, as you will need to have a computerized or POS solution in place to gather customer information as well as to track points and balances.
- App-based model. This is the most modern option available to you since the vast majority of people now have a smartphone. Cloud-based app rewards programs present additional opportunities that punch and swipe cards cannot offer. Things like promotional and sales notifications, or the ability to notify a customer that an out-of-stock item has arrived, and even notifications around new products which match a customer’s shopping habits are all at your fingertips. Using this model, you can integrate payment options directly into the app and your POS solution for easy checkout or on-the-fly ordering, which is especially beneficial for QSRs.
Regardless of which program model you move forward with, you want to ensure that signing up and using your program is simple and satisfying. If you plan to store customer data, security becomes a key consideration as well, and warrants looking into modern POS systems that can offer high levels of functionality and security in one solution.
Leveraging an Innovative POS Solution to Deliver Results
A customer loyalty program for small business can take advantage of a modern POS solution. Harnessing and utilizing the power of your customer data can change the game for your business and make running your rewards program nearly effort-free. Integrating your rewards program with your POS system becomes more of a viable option when you consider that processing rewards is part of the overall purchasing process.
The valuable data collected from your customers can be utilized to create some key automations within your business processes. Marketing campaigns can be better targeted, and notifications can be configured to alert your customers when balances are low or if they are eligible for rewards. You will gain insights into who your best customers are, key demographic information, their product preferences, and even their ideal shopping times so that the experience can be better aligned with their tastes.
Data security and reconciliation can be handled with ease with an innovative POS solution in place. A modern POS system will open the opportunity to use more advanced aspects of POS, such as geofencing, giving you an advantageous position through which to pursue and retain new customers.
Explore Your Customer Loyalty Program for Small Business Options
The keys to a successful customer loyalty program are to make it engaging and easy to use. Determining your goals and implementing a loyalty program methodology that fulfills these goals is only part of the solution. You need to blend these new business aspects into a modern POS solution that can handle both the heavy lifting of your business needs and the management of your loyalty programs.
Retaining an expert in POS and customer loyalty programs is a priority to ensure the success of this endeavor. You will require a wide range of customizable features and flexible hardware options for your POS to drive your success. At talech, we dig you’re your business to understand exactly what your loyalty program needs to accomplish for your business. Reach out to us today to sign up for a demo and to learn more about how talech can be your valued POS partner.