The Secret Ingredients to an Effective Loyalty Program for Small Businesses

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[5-minute read]

Loyalty can’t be bought, but it can be cultivated. And like anything valuable, it takes time to develop. As a small business owner, it’s worth thinking about ways to reach and retain customers with some version of a loyalty program. We’re probably all familiar with the Big Daddy of loyalty programs: air miles. Building up these points over a long period of time reaps real rewards: trips, cash rebates, and upgrades in flight comfort and experience. But what about you, the local butchery or bookshop? For the rest of us who aren’t Richard Branson, there’s always a way to foster connection with the people we’re serving. Let’s go through five core principles that are behind any effective loyalty program. No matter how big or small your business is, these elements will provide a firm foundation:

Make every interaction a memorable one

According to this study, 89% of companies see customer experience as a major factor that informs loyalty and retention. If you aren’t creating value or giving customers something to be excited about when they interact with you, then they aren’t likely to return. Excellent customer service should always be your priority; it’s your X factor. If you see your customers face-to-face, do your best to instil a sense of cheerfulness and helpfulness in you and your staff. And if you only interact with them online, do your best to be courteous and helpful in all your communication.

Create an exclusive experience

Like any club worth its salt, there should always be people on the inside, and people who are desperate to get inside. Making something limited – increasing the demand – works wonders when it comes to sparking interest and desire. Take the MAC Lovers program for example. Described as “a romance with rewards,” the cosmetic giant has tapped into the psyche of glam people across the United States. Ranging in levels from Lover, Devoted, and Obsessed, a member is granted access to increasing levels of engagement and exclusivity the more they spend in a year. By openly sharing the criteria to reach the coveted Obsessed level, MAC eggs on their customer base to spend more.

Leverage the “feel-good” factor

It’s good to do good, but how much better does it feel when we do good by not doing anything at all? That’s what Whereby has enabled their users to experience. They offer encrypted, unlimited video conferencing without an app or software download. To encourage use, Whereby stated that for every three meetings hosted on their platform in February, a tree would be planted in Madagascar or Mozambique. They reached their goal of planting 1 million trees, meaning that nearly 12 000 meetings took place every day of that month. That’s a lot of talking and a lot of people feeling good about talking because they’re saving the planet one word and one tree at a time.

Give your customers real perks

There’s no point in trying to attract and keep customers if there’s nothing worth sticking around for. That’s why an actual perk has to feature somewhere in your program. Is it a free coffee before a certain time, a discount on a pack of burger patties, credit towards a future purchase? Amazon Prime’s membership program offers a satisfying perk: free shipping. Simple and reliable, this (and many other features of the program) does a lot to retain a huge customer base.

Personalise your communication

In a digital world of codes, URLs, incorrect passwords, and avatars, it’s easy to feel like a collection of pixels. That’s why going the extra mile to offer some kind of personal touch in your engagement with customers is vital. People don’t want to feel like User Number X, they want to feel like themselves; unique. And beyond that, they want to feel seen and appreciated for choosing you to fulfil their needs. A handwritten note included in their delivery or a follow-up email with their name at the top and a personal question will cement your relationship with gold.

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