This is what happened – I was buying pants and it cost me £45. The underwear itself actually came to £10 however I, like many others out there, got sucked into the loyalty scheme/free shipping offer. The offer said that orders over £40 had free shipping, so what did I do? I bought more than I needed, spent £35 more than I intended and “saved” the grand total of £4.99.
So, why don’t all small business use some sort of loyalty scheme? What type of reward program could you use within your business?
Almost every consumer belongs to at least one customer loyalty program, whether it’s a supermarket points card or a fashion brand’s mailing list. In times gone by, customer reward schemes were only used by the “Goliaths” of the business world. However, more and more local small businesses are increasingly adopting similar programs to keep their customers coming back.
Patrick Bosworth, CEO and co-founder of revenue strategy solutions provider Duetto says “As consumers get more and better information regarding how to compare various products and companies, it is critical to compete on price and value.”
One of the main ways of doing this is by adopting a loyalty reward scheme that provides an experience. The most effective reward programs create a loyalty-building experience that keep customers connected to your business as well as coming back for more. The Internet and mobile technology has enabled greater customer engagement which allows a business to become a big part of a consumer’s everyday life. The ability to strengthen this relationship through a loyalty program is an attractive tactic for big and small businesses alike.
Rewards and Discount Program
This is arguably one of the most popular types of loyalty schemes and generally results in a customer receiving a coupon, free item or other incentive once they have acquired enough points by purchasing from the company. This type of loyalty scheme may be difficult to transfer to your industry, however you could easily adapt it to a similar reward program. For example; Amit Kleinberger, CEO of frozen yoghurt company Menchie’s has seen huge sales growth after starting a rewards program that offers $5 back for every $50 spent.
Kleinberger also noted that in today’s business world everyone is offering something so it’s essential to keep the reward something that is within the customer’s reach.
Boosting customer loyalty doesn’t have to be based around how much they spend. If your aim is to increase your customer base then why not get your current customers to do some of the hard work for you. Referral programs generally revolve around the idea that if a customer refers a friend then they get a discount or free item in return. This not only benefits the customer but also means that your customer base is constantly expanding with like-minded people giving you more time to focus on building your business.
Whichever type of loyalty program you decide to use, make sure you’ve done some research and are offering a program that is not only attainable, spending £40 to receive free shipping but is also something a client would want (pants).
We would love to know if you use a customer loyalty scheme and how they work for your business. Let us know in the comments below!