Loyalty programs are attractive to customers and business owners. Shoppers appreciate saving money and earning rewards they’ll use. In fact, according to surveys by IRI Consumer Connect and Hawk Incentives Research, over 70% of consumers choose a store based on a loyalty or discount program and nearly 80% look for deals in reward programs before making a purchase.
Business owners embrace customer loyalty programs because they encourage repeat business (65% of business comes from existing customers), build brand loyalty, drive increased sales, track customer spending habits, and earn referral business, all by making customers feel valued and offering them tangible, personalized incentives. These incentives range from coupons and discounts to redeemable points, free merchandise, early access to products, and other perks, like free shipping.
But how do you choose which type of program is right for your business? It’s important to keep three things in mind as you consider the options:
Types of loyalty programs
Although there are many types of customer loyalty programs out there, the following six are the most common and, in general, the most easily adoptable by customers and businesses.
While customizing a mobile rewards program can be expensive and time consuming, nowadays many mobile payment platforms, like Square, are integrating loyalty programs into their services.
How to start and run a loyalty program
For many small businesses, the most effective and cost-efficient way to select, implement, and manage a loyalty program is with the help of a rewards program technology company. There are many such companies out there, including Belly, Fivestars, Punchh, and Spendgo, among others.
Some of these digital loyalty programs require you to purchase and install additional equipment, like a tablet, at your POS that lets customers enter their information to earn and check on their rewards balance. These programs allow you to create email campaigns, send personalized text messages about sales, track customer data, and integrate with your social media accounts.
Other services work through customers’ existing credit or debit cards instead of requiring them to carry around an additional card. These services also issue relevant incentives to shoppers based on previous purchase history. Rewards are easily redeemed on customers’ phones and don’t require the purchase of any additional equipment.
For the value that customer loyalty programs offer businesses, it’s worth taking the time to research and consider what’s most convenient for your customers and what gives you the most flexibility to change the program as your business grows—which it certainly will with your expanding, loyal customer base!