Loyalty Programs for Small Businesses That Won't Break the Bank

By Keith Cawley

The goal of any loyalty program is to not only increase repeat business but to hopefully build brand ambassadors.

What’s a brand ambassador? It’s someone who frequently tells other people about your amazing business without any incentive from you. It’s word-of-mouth advertising, which studies have shown is one of the most effective ways to increase business. And best of all, it’s free.

But creating a loyalty program can be difficult if you run a small or midsized business, especially if you don’t have the necessary capital available. So, what are your options? Here are several ideas that won’t break the bank and will get you well on your way to creating brand ambassadors.

Create a Punch Card

If you run a retail business, restaurant, or coffee shop, handing out a business-card-sized punch card is a simple and cost-effective solution. Each time a customer returns to your business and makes a purchase, a hole gets punched in the customer’s card. Once a customer reaches a certain number of purchases, they receive a reward of some sort – maybe a free appetizer, or a $5 gift card.

This could also translate into a point system. Each visit is worth X number of points; once a customer reaches a specified point count, they can “cash in,” and redeem a reward.

Offer a Foursquare/Swarm Reward

Instead of creating your own loyalty program, why not take advantage of an existing social media solution? Check to see if your business is marked in Foursquare; if it’s not, add it. Then, offer a reward for people who “check-in” using the Swarm app (which is a new app connected to Foursquare). Maybe the reward is $1 off a purchase. It doesn’t have to be big. But offering a reward of some sort will encourage more people to stop by and check in – and hopefully leave a review of your awesome business.

Design a “Members Only” Option

This is similar to the punch card idea, but in this case, you encourage customers to sign up for a card. (This is also a great way to gather email addresses and other customer data!) Each time a customer visits your business and shows the card, they get a discount or an added perk. Again, the size of the reward doesn’t necessarily matter. It’s the perception of getting added value that others are missing out on.

Email Rewards

You are emailing your customers already, aren’t you? (If you’re not, move that up your priority list ASAP!) By offering an email list and encouraging your customers to sign up for it, you’re once again collecting valuable data. But also consider sending a special offer or reward to your email list subscribers. Maybe it’s a sneak peak of an upcoming sale. Or a special event that only those on the email list are invited to attend. The possibilities are endless.

Give Them a Reason to Come Back

These solutions are all well and good for retail businesses, but what about B2B options? We’re glad you asked. While a loyalty program might not be quite as obvious – and yes, many of the ideas above will work just fine with a bit of modification – consider offering bonuses to customers who do business with you. For example, a custom print shop can include a coupon for a discount on the next stationery order placed. Or maybe offer free or discounted shipping for future orders.

Tech Options

If you have a bit more money, consider adding technology to the equation. Instead of a punch card or membership card, try a loyalty software platform that allows customers to track visits and discounts online. This is not only easier for the customer – who typically carries a phone at all times but might not remember to pick up that loyalty card on the way out the door – but offers yet another opportunity to collect data.

Here are several affordable options:

• Belly: Allows your customers to download an app to track points. Because Belly is used by a number of businesses, it’s possible that some of your customers already have the app downloaded on their phones.

• Perka: This app rewards customers for visits only after their purchases have been confirmed by the merchant (unlike other loyalty app programs that allow points for checking in, even without a purchase).

• FiveStars: Allows customers to sign up using just a phone number – no app download required. It’s less comprehensive, but might encourage a greater number of sign ups.

The most important thing to remember? The only way a loyalty program works – regardless of which type of program you choose – is if your customers knows about it. Spreading the word and promoting your program is extremely important. Make sure all your employees not only know about the program but also understand how it works. Communication is a strong indicator of a program’s success.

So, what are you waiting for? Start working on a loyalty program plan now to begin creating brand ambassadors for tomorrow.