Best of the Blog: Create Your Own Customer Loyalty Program

Need a loyalty program? In one of our most popular entries from small business marketing expert Jane Applegate, you’ll get a step by step guide to setting up a loyalty program that’s right for your small business.

I’m special. In fact, I’m really special. According to the CVScustomer loyalty program, I am one of their “top customers.” And, because I use my “Extra Care” card every time I shop, I earned $151.01 worth of rewards in the past 10 months.  To show their appreciation, CVS even sent me a 25 percent off coupon valid for two days in June.
Big companies like CVS want you to feel special, too. They invest millions of dollars to build customer loyalty. The good news is that it is not off limits to small business owners. It is more than possible to establish dynamic and interactive customer loyalty programs on a budget.

Examples
The first step is to understand what makes a loyalty-marketing program successful. Ease of use is the top priority. For example, my husband Joe’s favorite loyalty program is a “Fuel Rewards” deal sponsored by the Price Chopper supermarket chain. The more you spend on groceries, the bigger discount you can get on a gallon of gas. Best of all, it’s easy to take advantage of the savings at the pump. All you do is swipe your Price Chopper loyalty card before you swipe your credit card to pay for the gas.

I belong to several loyalty programs including Talbot’s and Panera Bread. A few nights ago, when I registered my new “My Panera” card online, I was happy to see that I’d already earned a free espresso or smoothie drink. And that was after spending under $10 on a recent lunch. Their program is working because after registering my card online, I spent a few minutes learning more about their menus, locations and special offers.

Talbot’s, the women’s clothing chain, offers a loyalty program based on a point system for purchases. It’s a bit complicated, but when I signed up for the program at the check out counter, I ended up receiving about $50 off my purchases. I was a happy shopper.

Set Up Your Own Program
While big companies rely on point-of-sale software to track purchases and print out instant coupons, smaller companies can set up very simple and successful rewards programs that are just as effective. For example, the two sisters who own J.J’s Nails, my favorite nail salon in New York City, pass out business cards with nine little square boxes printed on the back. Each time you pay fora manicure or pedicure, the employee checks off a box. When nine boxes are checked, you receive the 10th service at no charge.

The Tucker Box coffee shop in downtown White River Junction, Vermont, has a frequent coffee buyer card that you can carry in your wallet, or if you prefer, they will store the information in their point-of-sale software program. After you buy 10 cups of coffee, you get a free one.

Here’s how to set up your own simple loyalty program:
First, think about what most of your customers buy and how often they buy it from you. If you sell raw materials in bulk twice a year to most customers, a frequent buyer program probably doesn’t make sense. But, you want to reward their loyalty so consider offering a discount on the product if they buy a certain amount. You might also send a thank you gift, unrelated to your product, such as a gift card.

If you own a bakery, restaurant or coffee shop and serve the same customers several times a week, a frequent buyer card is ideal. Since every consumer is different, you should provide various ways for people to participate in your loyalty program. Some people might prefer to build up points and redeem them online. Others prefer a physical card you check off or punch.

Follow Up
No matter what kind of loyalty program you institute, be sure to promote it to your clients via email, direct mail, on your website and via all your social media platforms (Facebook, Twitter, etc.) You have to make sure people know it’s there and understand all the benefits. Devote time and effort to signing up customers.  Then, do something to promote the program at least once a week via email or social media to ensure customers take advantage of those discounts, deals and special offers.
And of course, be sure to test and track response to the program. Survey customers and ask them if the program is working for them.  Remember, everyone likes to feel special.

Next Steps
Get the full Guide to Setting Up Loyalty Programs for Small Business
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Jane Applegate is an expert on small business marketing. She is the author of 201 Great Ideas for Your Small Business and can be followed at http://201greatideas.com/. Jane is not a Pitney Bowes employee and shares her insights on this blog as a paid contributor.