Graduallly losing customers is referred to as attrition, and it works against your growth efforts, undermines your advertising investment, and effectively costs you revenue. By knowing how to create and use an effective rewards program, you can increase customer retention, boost your customer’s lifetime value, and generate consistent repeat business.
clashgraphics.com gathered information about rewards program types, deciding which one best fits your business, and how to promote it.
Types of Business Rewards and Loyalty Programs
Regardless of your business’s size, an innovative approach to a customer loyalty program can result in significant value for your business and customers. Consider the following:
Punch Card Rewards
Tried and true, punch cards represent the innovative beginning of a system to generate repeat business. Brilliant and straightforward, you give a branded card to all of your customers, then punch it or stamp it each time they make a purchase. When the customer receives X number of punches or stamps, they receive a “free this” or a “discounted that,” along with a new card.
This type of rewards program comes with the following strong points:
- Punch cards are simple to print, implement, and use
- No POS or system upgrade is required
- Customers get one punch/stamp for each purchase or amount of money spent
- Receive a predetermined number of punches and get rewarded
- Customers are well-accustomed to this model
Drawbacks of a punch card rewards program include:
- Since punch cards aren’t part of an electronic system, customer information, including email addresses and phone numbers aren’t as easy to collect
- Customers may lose or throw their card away
- Some people don’t like carrying extra items in their wallet or purse
- In the digital age, punch cards may seem obsolete
Even with such drawbacks, punch cards are an effortless and inexpensive way to start rewarding your customers for their loyalty.
Membership Card Rewards & Loyalty Program Benefits
A step up from punch cards, membership cards offer greater insight into customer frequency and purchasing habits. Frequently used in casinos, grocery stores, pharmacies, gas stations, and convenience stores, your customers receive a scannable credit card-sized card and/or keyring tag presented at checkout.
Customers are encouraged to register their membership cards online for better deals and promotions. Thus, customer data collection is greatly facilitated.
The use of membership cards requires your POS system to be synced with the chosen rewards platform. With this system, customers can scan or swipe their loyalty card, enter the associated phone number or email to access their discounts or benefits.
Tip: Some membership cards allow customers to collect points and move through membership tiers. The higher the tier, the more benefits, discounts, and access to promotions or events.
Email or Phone Number Rewards
This type of rewards program solves the problem of carrying a physical card. You can register customers to your loyalty program through your POS system as they checkout.
If your business sells merchandise online and off, virtual systems like this allow your customers to combine their in-store and online purchases.
Online Rewards Program Registration
In today’s market, many companies operate solely online. Likewise, their rewards programs do too. Like other rewards programs, customers earn and use points for promotions, discounts, and can gain access to higher promotional tiers.
Requests to join these programs most frequently appear during checkout when your customer is prompted to sign in or create an account to start earning rewards.
Mobile App Rewards Program
You can create a customized mobile app with a third party’s assistance, or even through your online POS system. This helps you collect and organize customer information while having access to your customer’s activities, purchase history, and reward status.
This approach facilitates your tech-savvy customers’ online experience, increasing the potential for more purchases.
Rewards Program Structure
Once you determine the type of rewards program best suits your business, you can structure it to make sense for your customers and your business needs. Consider the following:
Rewards Based on Points - This structure is straightforward and easy to understand. Whether points are based on purchase amounts, visits, or ticket values, your customers are easily encouraged to make multiple visits resulting in many smaller purchases in a short period of time.
Rewards Based on Tiers - You can reward your customers based on tier levels, encouraging people to increase their purchases to get more benefits. Since tiered systems offer rewards, promotions, and benefits in levels of spending, customers who spend more have access to “better” deals.
Fee-based Rewards Program - In this type of rewards program, your customers pay a monthly or annual fee to access the program’s benefits and promotions.
Points and tier-based rewards programs are more popular among small businesses. They don’t present any barriers for customers to sign up. Businesses are gravitating more towards email, online, and mobile app types due to the minimal effort required by customers to participate in them or keep up to date.
Small Business Rewards Program Software
There are numerous rewards programs, and selecting one that meets your business’ needs may present a challenge. When doing your research, consider the following attributes:
Universal Customer Experience - Your customers should have access to your rewards program in-store, online, via PC, Mac, mobile, or other devices.
Customized Rewards - Rather than one-size-fits-all, your rewards can be structured to let your customers determine which rewards they want to access.
Ease of Use - Younger tech-savvy customers may reject the idea of using punch cards and key tags, while older generations may shy away from using an app or online program. For your business to capture customers across generations, select a system that makes the signup process and use as simplified as possible.
Data Segmentation - As your customer base grows, you should be able to group your customers into categories. This ability allows you to more efficiently market specific products to those customers more inclined to purchase them.
Information Integration - Your rewards program should have the ability to retrieve and deliver data seamlessly across your business’ devices and software.
The following software options can help a small business grow their revenue and foster lasting customer relationships by building tailored rewards programs:
- Loyalty Prime
- Glue
- Open Loyalty
- CandyBar
- Fivestars
- Revetize
- Kangaroo Rewards
Tip: Before settling on any rewards program software, know your operating/POS system, and make your selection from those software options that will function seamlessly on your system.
How To Promote Your Rewards Program
Once you have your rewards program up and running, you’ll need to start spreading the word. Use the following to draw your clients to your rewards program:
- Use in-store signage including flyers, window signs, posters, and banners
- Make sure signage is clear and enticing at POS
- Advertise it on your business website and provide a way to easily opt-in online or by downloading your app
- Educate your employees on how to incentivize customers to signup
- Use picture and video on social media platforms to promote your new rewards program
If your customers aren’t aware of your rewards program, chances are they won’t use it. The potential payback from your rewards program warrants investing in an aggressive marketing strategy.
Rewards Programs That Grow Your Business
In this article, you discovered several types of customer rewards programs, how to find one that fits your business, and promoting it to your customers.
Creating and using a customer rewards program for your business can increase your revenue, customer satisfaction, and generate repeat business.
Without rewarding your customers for their patronage, you risk losing them to your competitors and the revenue they take with them.
Sources:
sba.gov/taxonomy/term/15051?page=25
shopify.com/blog/loyalty-program
us.accion.org/resource/setting-loyalty-rewards-program-why-and-how/
business.org/marketing/sales/create-effective-customer-incentive-program/
archerytrade.org/create-a-profitable-customer-rewards-program/
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2233 Peachtree Rd NE Ste 202 Atlanta, GA 30309
(678) 235-3464
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