Customer Loyalty Programs: Are They Worth The Cost?
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Customer Loyalty Programs: Are They Worth The Cost?


Customer loyalty programs seem to encourage repeat business but are they worth their cost?  As a start-up you’ll do just about anything you can (legally) to get the word out about the products and services you provide.  One incentive that seems to have worked well in the past for other businesses is the customer loyalty program.  Relatively easy to start and maintain, this type of promotion is the perfect way for new small businesses to get started in their community. Don’t forget one of the most important truths of running a business, it’s cheaper to retain customers than to find new ones!

Small businesses now have an option to offer loyalty perks through services like Perkville, FiveStars, and Belly relatively inexpensively.  For a monthly subscription fee, interested parties can customize their loyalty program and decide how their members utilize points.  The more a customer talks about and frequents a business, the more points they receive.  Bonus points are even offered on a member’s birthday.  It’s a winning solution for all.

If you’re looking into starting your own rewards program, there are some things to consider.  The following tips will help you get started:

  1. Design a program that is effective but doesn’t cause you to go bust.  Some people take loyalty to the extreme.  They’ll have you paying out in reward points far faster than you expected them to.  Make sure that the loyalty program benefits both the business and your customers.  Set a certain dollar amount per transaction or number of visits as a requirement for earning loyalty points.
  2. Make the rewards you hand out fun and useful.  Gift items do not have to be expensive to be effective.  Think about what your customers value most and offer it to them in the form of a reward.  Free drinks and food are always a winner.  Gift certificates and free discounts are always a winner.
  3. Promote the program.  Get your employees on board.  Have them ask each and every customer if they’ve joined your loyalty program.  Send out texts, emails, and even flyers with information about the incentives that you offer.  This will serve as an enticement for your customers to shop, dine or work with you.
  4. Add new incentives regularly.  Don’t offer the same old perks.  Offer specials and new rewards from time to time.  This will help you gain new customers and also satisfy the old by giving them a reason to continue to earn loyalty points.
  5. Partner up with other businesses.  Cross promote each other’s loyalty programs.  Offer incentives that benefit the other business and ask that they do the same.  For example, if your business sells products, you can offer a free meal or gift certificate at a local restaurant in exchange for a certain number of points.

Customer loyalty programs are effective if they are utilized properly.  They can help win over new customers and keep your oldest customers coming back for more of what you have to offer.  Starting a loyalty program is easy.  Some of the loyalty perks services listed above offer a free trial.  That gives you time to see if the service is something that will benefit you.

Make sure that you clearly state the rules and regulations of the program so that it doesn’t get abused and wind up costing you more money than you care to dole out.  Post the terms and conditions of the loyalty program on the back of the cards you hand out, on the literature you give to new members, and on your business website so there won’t be any problems that arise in the future.  A loyalty program has it perks.  Reap the rewards along with your customers today.




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