It’s a common misconception that loyalty programs are reserved for large corporations. Yes, retail giants have a huge customer base. And yes, they have access to sophisticated technology that smaller companies often lack. But small businesses can take advantage of this tactic to increase repeat business as well.
Why repeat customers matter
It costs ten times more to acquire a new customer than to keep a current one. Sixty-one percent of business owners surveyed said that the majority of their revenue comes from repeat customers, according to a report by Manta and BIA/Kelsey.
Loyalty programs are a great way to encourage existing customers to shop regularly with you, boosting your revenue along the way.
Hidden benefits of loyalty programs
Loyalty programs are also a great way to help you compete with big business. Your smaller, local business might have better products, but customers are lured to bigger businesses by the promise of a better deal. Offering discounts through a loyalty program helps you give your customers the best of both worlds. And when your customers are happy, they’ll tell their friends and family, giving you some free marketing that helps your business even more, according to technology and services company Incentive Logic.
Paychex, a company specializing in payroll, human resources and benefits, adds that loyalty programs will also help you build your marketing list. Growing your loyalty program means growing the list of customers to whom you have direct access, allowing you to communicate about exciting sales or deals with the customers who’ll be most interested.
What kind of program do you need?
A good loyalty program doesn’t need to be fancy. What matters is that it’s tailored to the needs of your business and gives your customers an incentive to keep buying your products, according to Forbes.
Learn how to launch your own loyalty program in Part 2 of this series: “Designing a program for your small business.”