Loyalty programs have been a growing trend for small businesses and Fortune 500 companies alike, and for a good reason: selling to current customers is much easier and cheaper than trying to acquire new customers.
A loyalty program can bring an immense value to any business. Large corporations recognize that, and spend millions of dollars developing effective loyalty programs. This is bad news for new businesses as they continue to lose ground to large corporations.
The good news is that as a small business owner, you can benefit from their research at no cost by applying their techniques to your own business. Here are just some examples of what you could do:
1. Add an element of a game to your loyalty program
Gamification is a concept Fortune 500 companies utilize across all areas of business, including loyalty programs. The success of Starbucks’ loyalty program is unmatched, even among Fortune 500 companies, and gamification has been widely credited as being the deciding factor. In addition to the point accumulation typical of loyalty programs, Starbucks keeps its customers on their toes with techniques like having surprise raffles where winners are drawn at random.
Some aspects of gamification, such as the Starbucks’ custom loyalty app with video game-like feel, are out of reach for most small businesses, while others are very feasible to try.
For example, surprise your customers with your own raffle. Send an email, text, or mobile app notification via your loyalty program to track responses and visits. The prizes don’t even need to be very costly as long as they’re devised to make the winners feel special.
2. Appeal to your customers’ values
Contribute to a good cause and drive more foot traffic to your store. For big business examples, look no further than Tom’s, a shoe manufacturer that rose to prominence with its promise to match every purchased pair of shoes with a pair donated to a child in need.
Of course this particular approach may be too drastic for most small businesses, but you can still reap the benefits of value-driven loyalty without significantly altering your business model. For example, a coffee shop can incentivize its loyal customers by running a limited-time promotion where 5% of profits are donated to a local charity.
3. Partner with another local business
Raise the value of your loyalty program to your customers by partnering up with another business that offers products or services that are complementary to yours. AmericanExpress has rolled out the collaborative loyalty program, Plenti to offer customers joint rewards on their purchases from a number of businesses ranging from Macy’s to Hulu.
Possible applications for small businesses are endless. For example, if you have a coffee shop, partner up with a nearby bakery to provide joint deals and increase the foot traffic to both locations. For more tips on strategic partnerships, see our previous post: 3 Smart Partnerships to Increase Business Growth.
By incorporating or borrowing these three ideas, you can easily reap the benefits of a big brand’s loyalty program without the big budget.