Every small business aspires to grow, maintain loyal customers and gain new ones. One way to do this is through a successful loyalty program.
According to statistics by KISSmetrics, customer acquisition costs 7 times more than customer retention. Therefore, it would do you good to develop programs to encourage current customers to keep coming back.
Data from the National Retail Federation’s Top 100 retailers chart states that among those on the list, 51% have some sort of program. 73% of these programs are points-based while 24% of these are credit card points.
It also points out that retailers with loyalty programs fare better in terms of earnings. In 2014, retailers without loyalty programs earned $496 billion in revenue or an average of $9.9 billion each while those with loyalty programs earned a total revenue of $1 trillion or an average of $20 billion each.
Even if yours is only a small business at this point, you can still gain big benefits from rewards programs. To give you some ideas on the types of programs you can develop, here are some successful ones you can use as your pegs.
The My Starbucks Rewards program is one of the most successful ones because it is truly centered on their customers. Their program involves customers earning Stars for their purchases. These stars are recorded on their profile and can earn them free drinks or food rewards, custom offers, early access to new products and easy payment with their mobile app. Customers can also level up to the Green and then the Gold tiers the more Stars they collect, which gives them the opportunity to earn greater rewards.
Sephora’s Beauty Insider rewards customers for their product addiction stating that it “can be a very beautiful thing”. Their three-tier program operates under a point system wherein every dollar spent on merchandise earns one point for the customer. Customers start from the Beauty Insider level wherein they can earn a birthday gift, free beauty classes, product rewards, and seasonal promotions. By leveling up to the VIB and the VIB Rouge levels, customers get to earn more perks. What’s also nice about the program is that Sephora provides personalized product recommendations to customers who complete their profiles on the site.
The Walgreens Balance Rewards also operates under a point system. Customers earn 10 points per $1 spent and earns them access to Members Only perks and paperless coupons. Bonus points can be earned for purchasing featured products as well. The best thing about this though is that they reward customers for making healthy choices too, such as walking, quitting smoking, weighing in, getting a blood pressure test and more. Plus, they make it easy for customers to use the system. They can present their physical card or just their mobile card through the app or even by using their phone number in store at the checkout.
The Loyallist program points system is slightly different in that customers earn points for every dollar spent no matter how they pay, whether in store, online or at their outlets. This encourages customers to keep spending more. There are also many opportunities to earn rewards cards faster with double, triple and Power Points. They also provide free shipping every day with no minimum purchase required.
REI’s membership program is something that appeals to their adventure-seeking customers. Simply by joining and spending a minimum $100, customers get to join the lifetime program and are automatically given a $20 digital bonus card. They also get dibs on exclusive member deals, in-store discounts and even a 10% annual membership dividend. But what’s great is that they also appeal to the interests of their customers and provide them with discounts on adventure trips and classes.
These examples prove that rewards programs are effective in achieving customer loyalty. By picking out the best features from these successful programs, you can develop one that will work best for your small business too. If you need more assistance, there are customer service outsourcing providers that can help develop and implement a program for you.