How and Why FiveStars Increases Revenue for Your Business

Kenny’s Coffee Cabana rocked (or so it seemed). The coffee was killer, service was stellar, and Kenny was a savvy small business owner. The Cabana had a decent flow of customers, but revenue hadn’t reached heights it certainly could. Something was off, but what?

“I need more customers,” Kenny thought.  “I have regulars, but what I need is more new business to take revenue up a notch.”

Kenny dabbled in Groupon deals, Yelp ads, printed flyers, sponsored Facebook posts and more to attract new coffee fiends. New faces came in occasionally, but not as often as he’d like, and eventually, those fresh faces never came back. That’s because 60% of first-time customers never visit a new business again – It’s just a fact.

KennyStar1Then, Kenny had an “Ah ha!” moment. Loyal, dedicated customers (20% of your customer base) drive 80% of your total revenue. Why not turn more customers into loyal customers who visit and spend more often to increase revenue?

While Kenny used punch cards, they weren’t doing all that much to motivate his current customers to come back, nor did they help him collect customer information in order to reach out and stay top-of-mind.

Kenny then invested in FiveStars to reward and communicate with current customers. His loyal customer base doubled, regular customers came in twice as often, and they spent more each visit, too. Even better, those loyal customers were so happy with Coffee Cabana’s rewards program, they told their friends about the program and coffee shop, too. Finally, fresh faces also turned into familiar faces.

After using FiveStars for a couple of years, Kenny saved up all of his additional yearly revenue and opened up a second Coffee Cabana just a few months ago. Kenny’s Coffee Cabana rocks!

Download our free retail customer loyalty success guide to learn how to drive customers back 2x more.

The impact of FiveStars

Business owners using FiveStars get the average customer to visit two additional times per year. If the average customer spends around $10 per visit, those two additional annual visits result in an extra $20 per customer.

That may not seem like much, especially over an entire year. However, the average small business owner using FiveStars has around 1,200 loyalty program members each. Times that $20 per your 1.2K members, and that’s an additional $24,000 made per year because of your FiveStars loyalty program.

What is it about FiveStars that drives such significant results for Kenny’s Coffee Cabana, and the 10K other small businesses who use the customer loyalty program? How can you increase revenue for your own business using FiveStars? Let’s dive in:

Why customers visit and buy more often

There are two main reasons why a customer comes back, and more often to a small business using FiveStars:

1. Your  customized points and rewards program, with its multiple reward tiers and layers, incentivizes customers to come back.

  • Why? Because customers have multiple goals, your free offerings, rewards, or status levels, they want to achieve. Those offerings and goals are perceived as additional value for loyalty members, yet don’t hurt your bottom line. Hence, customers come in more often, spend more to achieve those goals (also known as frequency compression), and thus feel rewarded and appreciated for being loyal. 
  • This also gives you a competitive advantage over big box businesses, and others who don’t offer as robust of a program.

2. FiveStars drives even more repeat visits from your customers through consistent, intelligent, and incentivizing messages and promotions.

  • How are these messages intelligent? The FiveStars program tracks your customers’ visit behavior. Then, with our multiple messaging features, you can either automatically send offers based off that behavior (using AutoPilot). and/or you can segment and message customers based off their ‘status’ (VIP, regular, new, “lost”) to send promotions and offers that connect with customers and keep your business top-of-mind.
  • Businesses who send effective, targeted promotions can see an immediate increase in repeat business by at least 70 percent. In addition, those promotions also result in a 70% increase in full-priced visits at a later date. Yes, the initial promotion included a discount or free item, however, it also drove additional full price spending that may have never occurred otherwise.
  • The most successful small businesses send out a minimum of two targeted/segmented promotions per month.

While FiveStars has a lot of moving parts, every piece serves to increase your customers’ lifetime value. The more customers you sign up to your FiveStars loyalty program, the more revenue your business will experience as a whole, just like Kenny’s Coffee Cabana.

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