Running a loyalty rewards program is the best approach to retain existing consumers. It can also help you acquire new clients by setting your business distinct from the competitors. With rising competition in the market, more firms are realising the necessity for client loyalty. Encouraging clients to stay loyal has become a struggle for businesses, especially for the little ones, as customers have thousands of options to pick from in the market.
This is when loyalty programs come into play. Almost every business, from ordinary to large-sized, is running a reward program today. But for small firms, it is not particularly feasible to invest a lot on loyalty programs. However, with a good approach, small businesses may build powerful loyalty rewards programs inside their budget. Before you start looking for a loyalty program provider, you must understand why loyalty programs are so crucial for a business:
Why is a Loyalty Rewards Program Important?
Studies reveal that obtaining new consumers can be 5 to 25% more expensive than retaining the existing ones. Though it is crucial to attract your target audience, concentrating more on client loyalty can take your business to another level. Customer loyalty counts even more for small organizations, who can not invest much on customer acquisition.
In today’s competitive industry, it becomes tough to persuade your clients to stay loyal when they have a lot of alternative possibilities. But with an efficient loyalty program, you can keep your consumers coming back again and again. With these programs, you can reward your customers with every purchase they make. It helps people feel that they are receiving something in return for their expenditure. As a result, individuals are encouraged to make repeat purchases to win greater prizes.
Some of the most notable advantages of loyalty incentive schemes include:
Helps in customer retention.
Encourages clients to make recurring purchases, which further raises the Customer Lifetime Value (CLTV).
Strengthens your relationship with your customers by enhancing customer satisfaction.
Helps you differentiate your brand from the competitors.
Tips for Running loyalty programs for small businesses
If you are running a small business and wanting to develop a cheap yet effective loyalty program, the following strategies might help you reach your goal:
1. Profile your customers
Profiling your customers refers to developing a perfect image of your target demographic. It is crucial to understand what your target demographic or your consumer base looks like. You will have to analyze your consumers and categorize them based on their hobbies, buying habits, geography, etc. Also, check your customers’ statistics to find out how many customers make repeat purchases and what is the percentage of one-time buyers.
You should also analyze the evaluations and feedback of your consumers to discover what they appreciate the most and what they do not. After analyzing the requirements and interests of your customers, you can develop the most successful loyalty program that fulfills its function of client retention perfectly.
2. Find What Your Customers Value
You can not make the most out of a loyalty program until you offer something that your clients value. The prizes or advantages you are delivering must be engaging enough for your clients to develop excitement among them. They will undoubtedly return back to receive more prizes, given that the benefits are valuable for them.
To find out what your customers are interested in, you can do customer surveys or launch polls through your social media accounts. Another strategy is to introduce short-term offers with several incentive possibilities and observe which offer receives the greatest customer involvement. Going with a rewards-based or a cashback-based loyalty program is always a secure decision. You can either provide a set percentage of cashback or a certain number of rewards every time your customers spend a specific amount on your business.
If you are building a rewards-based loyalty program, strive to offer some amazing redemption choices to your customers. Allowing consumers to utilize the rewards against future purchases is the most effective strategy to drive repeat purchases.
3. Build 2-3 Programs
Many firms have different types of loyalty programs running simultaneously. You may also do the same to set your business distinct from the competitors and make the loyalty program attractive for your customers. Let us help you comprehend this with an example. Suppose you manage a rewards-based loyalty program. You have a separate portal for loyalty programs where your customers may log in to track their rewards and redeem them.
To make this software more entertaining, you can integrate gamification. Along with the standard rewards that your clients gain on making purchases, allow them to boost the quantity of earned reward points in some additional methods. You can achieve this by holding a ‘Spin to Win; contest on your website or app. Give your clients a chance to spin the wheel once every day and get some additional incentives. This can help you increase log-ins to your website/app and also make the loyalty program attractive for your clients.
Similarly, you can even run tier-based loyalty programs along with a standard rewards program or a cashback scheme. The more benefits you offer, the more your consumers are incentivized to stay loyal.
4. Find The Right Platform & Automate The Program
You may find several systems online that run loyalty programs for small businesses. To pick the proper platform, you have to keep a lot of aspects in mind. Your initial step should be to determine a budget and look for loyalty solution providers that meet your needs. Pine Rewards can help you run the best loyalty programs with prizes starting from as low as Rs. 10.
Also, make sure that the platform or tool analyzes your business objectives and builds a loyalty program that corresponds with the interests of your customers. The platform should also allow you to automate the loyalty programs as running them manually can be a big challenge. For automation, you can establish a separate rewards system where your customers can register an account, and all their awards get earned automatically when they make a purchase.
Best Loyalty Program Ideas for Small Businesses
The benefits of loyalty rewards and not unknown to businesses these days. However, you need to choose the correct form of loyalty program for your brand in order to make it function effectively. The following are some excellent and most cost-effective loyalty program ideas for small businesses:
Punch Cards: A punch card is one of the most basic sorts of loyalty programs. With a punch card, you may urge your consumers to make a set amount of purchases in order to earn a free gift/reward. For example, say you manage a salon. You can print punch cards with 9 empty boxes and insert a complimentary service (like a free hair spa) in the 10th box.
Now, every time your consumer visits and avails of your service, a box in their punch card gets marked. On their 10th purchase, customers can avail of a complimentary hair spa along with the service they are going to indulge of. This is one of the easiest loyalty programs as you don’t need to make any particular efforts to manage this.
Come Up with Membership Plans: Customers adore it when they are appreciated for their purchase. Having a membership plan is one of the best ways to make your loyal customers feel unique. You can either have a free membership plan or a premium plan or both. Allow your consumers to sign-up for the membership plans and use of the perks.
If you are having a free and paid membership plan, you might integrate more perks with the paid plan. Make sure not to maintain the pricing of these plans low and reasonable for majority of your consumers. Your goal should not be to create cash out of this fee, but just to have your clients stick to your brand. Once your clients pay a premium for the membership plan, they are significantly less likely to switch to other brands.
Points-Based Rewards Program
Points-based reward schemes are the most popular these days. You can offer a particular number of reward points on every purchase your clients make. In these programs, the number of reward points is predetermined against a certain expenditure amount. The monetary value of awards and redemption choices can be chosen by the brand.
For example, you can provide 10 Reward Points for every spend of Rs. 100. Now if a customer makes a transaction for Rs. 500, they gain 50 points. Let’s say the monetary value of 1 Reward Point is Re. 0.5 and you offer redemption against your own items or services. The next time your consumer purchases something, he/she gets Rs. 25 (50 points worth Re. 0.5 each) off on this.
Referral Programs
Referral programs do not only work for customer retention but are also incredibly efficient in gaining new clients. You can launch a ‘Refer a Friend’ contest on your website or app. Make sure that you offer some excellent prizes or discounts so that your clients refer as many friends as they can. Once their friends sign up or make a purchase, your customers as well as the friends earn the prize.
The benefits of loyalty rewards are not only restricted to client retention, but these programs also help you gain new consumers, enhance brand awareness, and improve customer happiness.
Run an Effective Loyalty Rewards Program with Pine Rewards
Pine Rewards is one of the biggest rewards and loyalty program providers in India. With high-quality and low-cost prizes, Pine Rewards can help you operate cost-effective loyalty programs that are just suited for your small business. The team of marketing specialists at Pine Rewards evaluates every minute detail of your business to come up with an effective loyalty program plan that works best for your brand.