How to Build a Loyalty Program That Keeps Customers Coming Back

2 months ago   •   3 min read

By Sarah Greesonbach

In a local economy bursting with choices for consumers, a one-time customer is a missed opportunity.

The COVID-19 pandemic changed consumer behavior—and 76% of them changed stores, brands, or the way they shop, a McKinsey & Company survey discovered. Even if you've been a longtime favorite, the odds are high that your customers might be open to trying out a new provider.

So where does that leave your small business? How can you make sure that your customers continue to choose you—today and for years to come? A strong and mutually beneficial loyalty program is one way.

Loyal customers pay dividends.

Customer loyalty programs are more than a marketing fad—these programs help companies see more repeat business, and they can also help companies reach new audiences. For example, 6 in 7 millennials surveyed by KPMG said that they belonged to a program, and 81% said their membership in the program spurred them to spend more money with the company.

There's also a direct link to profits. Even a 5% increase in customer loyalty and retention could return anywhere between a 25% and a 95% increase in profits.

Ready to create a successful program for your customers? Here are three steps to get started.

1. Build on your unique vision and selling proposition.

The best loyalty program for your company won't be a cookie-cutter version of your competitor's. It should be unique to your vision, selling proposition, and customer base. Listening to your customers and knowing their needs is key.

If your customers are price-sensitive, a program based on discounts or promotions might resonate the most. The important thing is that your program is customized to retain the customers that have chosen your company and to attract new ones that'll stay for life.

Build your program with the same business software you use for the rest of your customer service tasks—like the ones you use to send marketing emails, schedule online appointments, take payments, and collect customer email addresses. Providing your customers with a seamless experience across multiple touchpoints enhances their experience—and a happy customer is a loyal customer.

2. Make your loyalty rewards program win-win.

Customer loyalty is a boon to businesses—it yields higher customer retention rates and repeat business, and it boosts profits. But the ultimate goal of a customer loyalty program is to deliver benefit to your customers—and they have a lot of options when it comes to building long-term relationships with businesses.

Once you decide on a program, step back and ask yourself whether what you're offering is something a customer could get excited about. Are the benefits enticing? Is it easy for subscribers to get those first few big wins, creating that all-important rush that keeps customers coming back again and again? And are the benefits balanced enough that maintaining the program won't eat too much of your profit? Spend the time now at the planning stage to ensure that your program is truly a win-win proposition.

3. Promote, promote, promote.

Customer rewards programs come in every shape and size, but the most successful ones share one thing in common: There was a clear plan for announcing, sharing, and promoting the program to new and existing customers. After all, a program is only useful if you can get customers interested in it.

As you brainstorm what your program will look like, think about how you'll make customers aware of it. You could announce and promote your loyalty program by:

  • Pairing it with a special promotion, such as a discount for customers who enroll during the program's first month
  • Training staff to introduce the program to customers during check-in and check-out
  • Displaying a tablet by your register that lets customers sign up for the program on their own
  • Announcing program details to existing customers via email and letting website visitors sign up
  • Printing brochures to hand out to customers during check-out
  • Taking out digital ads on search engines or posting sponsored social media content

Loyal customers recommend your business to family and friends, write positive reviews, and stick with you for the long term. They drive a lot of value beyond what they do for your bottom line. Build out a strong loyalty program—then get ready to see results.

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