10 Ways to Create a Customer Loyalty Program

Having loyal customers who return to do business with you time and again is one of the biggest keys to your success as a small business. Creating a customer loyalty program is one of the easiest ways to build your base of regular customers.

A study by Bain & Company showed that you can increase your profits by as much as 25% to an astounding 95% simply by holding on to just 5% more of your customers. Gartner Group says 80% of the money you’ll make in the future will come from 20% of your existing customers.

Clearly, holding onto your clients should be a priority. After all the time, money, and effort you invested in getting folks to do business with you in the first place, the last thing you want is a one and done. Here are ten great ways to ensure a lasting customer relationship.

1. Offer Freebies to Repeat Customers

Customers expect excellent service and good value. What else can you give them? Freebies! A reward program will offer your customers extra benefits for continuing to do business with you.

What can you offer? Ideally, something related to what they’re already buying. Something that will be a good perk for them without costing you a bundle.

Think along the lines of “buy seven coffees, get the eighth free.” Purchase five car washes, get the interior done for nothing. Come in for ten manicures, get a pedicure on us.

Whether you go old school with a punch card or high tech with an app, tally up the visits and give something back. Once someone has invested their time and money along the way to a reward, they’re much more likely to continue coming back.

2. Provide Customer Discounts Or Cash Back

Money talks. And few things speak louder than saving money on purchases. One way to cultivate loyalty is to offer discounts for customers who come back. Some ways to offer discounts:

• Tuck a coupon, good for a future visit, into the bag when you’re ringing up a sale, and tell the buyer about it so they don’t miss it.
• Print out a special offer on the register receipt offering a percentage off or money back on a purchase for a certain time period. It’s a great way to thank someone for their current business and encourage them to come back.
• A local card store we know has a punch card filled with circles from 50 cents to a dollar. They punch out the circles based on how much you spend, and when the card is all punched out, you get $5 off your next purchase.

3. Offer Premium Membership Programs

In some cases, your customers will actually be willing to pay MORE to do business with you, provided they get enough back in return. Consider Amazon’s Prime service. For $119 a year, you get free 2-day shipping, TV and movie downloads, music streaming, photo storage, and more.

These programs are a little trickier to implement than straight loyalty reward programs, and you have to make sure you’re offering value for your customers without costing yourself too much money. But they are a great way to keep your business top of mind so that it’s the first place people turn to when they’re shopping for what you offer.

4. Give Gifts for Referrals

What’s better than getting repeat business from your customers? Getting their friends and family as customers too. Ideally, your clients like doing business with you so much, they’d be happy to spread the good word. So reward them for doing so.

Offer a free month of service or a major discount to a client whose referral signs up with you. Even better, offer something to both your current customer AND the new referral. That’s a great way to build loyalty from both of them.

5. Hold Contests

People like to win stuff. Make doing business with you fun for your loyal customers, and give them a chance to win something. Give everyone a certain number of contest entries based on how much they spend or how often they visit you, and draw a winner for a cool prize.

You’ve probably seen the fishbowl-full-of-business-cards in your local luncheonette, but this type of customer loyalty program works for all sorts of businesses. Have everyone drop in a card or fill out an entry when they’re at the register, and pull one business card per week for a free meal, $20 worth of dry cleaning, a free blowout, etc. Not only do you encourage repeat business, but with permission you can use the contact information to help build your email list for marketing. (Be careful – without permission, it’s spam.)

6. Send Email Promotions

Speaking of your email list, for repeat business, it’s essential to have an email list. Whether someone is shopping with you in-store or online, capture their email address and add them to your marketing list (again, with permission, by having your customer check an opt-in box.)

Right off the bat, give your patrons an incentive to sign up for your list. You can offer an on-the-spot discount and send coupons and special offers each month. Then, encourage the people on your list to forward the email to friends, expanding the promotional circle even wider.

Periodically, send out coupons, advance notice of sales, or information about new product offerings. Offer opportunities that aren’t available to everyone else, just your loyal customers, to make them feel special and valued.

Send birthday offers, and tie promotions into the holidays and seasons. If you have the time, keep track of what your clients have bought so you can send them special opportunities personalized to them. If Jane can’t get enough of those beautiful statement necklaces you carry, for example, email and let her know when the next season’s collection comes in. Send a 10% off coupon in the email, and you’re more likely to get a sale.

7. Hold Customer Appreciation Events

What better way to make customers feel special and encourage customer loyalty than by treating them like the valued clients they are?

Have an after-hours wine and cheese party. Open early or stay open late for a special, invite-only crazy markdown sale. Choose a “Customer Office of the Month” and cater lunch. Whatever you decide, do it on a regular basis so that these customer loyalty program events becomes associated with being a loyal customer of your business.

8. Spread the Word With Social Media

Nothing is better than some positive buzz for your business, and that’s where your loyal customers can help you excel. Put them to work as brand ambassadors, and reward them for talking you up.

• Restaurant owners can give patrons a free dessert for posting an Instagram of the scrumptious dinner you just served.
• Offer a special discount for Facebook friends who repost your promotional status.
• Have a coupon deal for your Twitter followers or a check-in special on Yelp or Foursquare.

Make it worthwhile to be involved with your business in real life and on social media. Post photos of your customers on your website and on social media (with their permission, of course.) If applicable, share their stories, blogs, and LinkedIn posts. Retweet them.

9. Be a Customer Yourself

One of the best ways to have loyal customers is by being a loyal customer yourself. This is especially true if you provide a service or do most of your business with other businesses, but it can work for everyone.

Get to know your clients and patronize THEIR businesses when possible. Make referrals. Send business to the people who are doing business with you. Be proactive about trying to make connections between your customers. Everyone benefits from this, and it’s another great way to cultivate loyalty.

10. Say Thank You

Never for one minute let your customers think you take them for granted. The easiest, least expensive customer loyalty program is also one of the most overlooked: show your gratitude. Smile. Learn your customers’ names. Remember how they take their coffee. Throw in a little something with their order.

Train your staff to love your clients as much as you do. Loyalty programs may end with a punch card, but they start when your employees punch in for work.

Customer loyalty programs are very useful tools, and we strongly recommend you try one (or several) of the ideas we’ve suggested. Also remember that it’s the day-in, day-out interactions you have with people that add up to a great customer experience and keep them coming back.