Build a customer loyalty programme for your small business

It is often cited that to acquire new customers it can be as much as 10 times more expensive vs engaging with your existing customers.  So with this in mind it is important to consider, as a small business owner or start-up, how to focus on keeping your existing clients happy and reward them.  Of course it is often not possible to just focus on this as a strategy in isolation, but certainly it should be part of your marketing mix.

I often talk with my clients about different media having different roles to play within the marketing mix.  A TV advert, for example, will in most cases be around brand building and driving awareness; supported by other media such as email marketing or social media will ensure you achieve your business objectives. All of the cogs have to be working together like a well-oiled machine to gain the most from any investment.  Loyalty programmes, email marketing and social media all serve businesses very well to help retain their clients. Some good big brand examples would be: Tesco with its Clubcard programme and Boots with its loyalty programmes.  Whilst I am sure many small businesses or start-ups don’t have multi-million pound budgets to spend on such schemes there are things we can do to encourage loyalty.

What is a customer loyalty programme?

A customer loyalty programme is a marketing tool which is aimed at rewarding loyal customers and encouraging customers to engage more regularly with a small business.  The business will share benefits, discounts, free products or promotions as part of this marketing tool as a thank you to the customer.  

Why do I need one?

A good loyalty programme should form part of your marketing mix. As a small business owner, there are two main reasons why you would consider investing in a loyalty programme:  

  1. A good loyalty programme will encourage your customers to return to you and engage in your service or buy your products vs your competitor.
  2. The information you can gain from your customers will help you to be more targeted and specific in the content you share, the service that you offer and the media you select to engage with them.

What kind of things could I offer to encourage loyalty?

There are many things which you could offer as part of the loyalty programme.  In many cases a loyalty programme will offer rewards, promotions, discounts, exclusive events, extended customer service or value adds for frequency of purchase or engagement as part of the programme.  Think about what you are able to give as a thank you and ensure that it is financally viable for your business.

Five things to think about when setting up your customer loyalty programme:

  1. Objectives.  Be clear on what you are trying to achieve with the programme – do you want to increase the number of customers or returning customers?  Or increase the amount that they spend with you.  Put specific metrics and measures in place to assess is working?  One thing you don’t want to do is to dilute any potential revenue you might already be achieving.
  2. Build your proposition.  Once you are clear on what you want to achieve from a business perspective, build a proposition which fulfils this and is what your clients want.  For example, if you run a café in January, and you are promoting cakes when everyone is trying to recover from the festive indulgences, this may not be as successful as it could be at another point in time.
  3. Technology.  Once you have decided your proposition, make sure you implement technology or a mechanic to track what is being redeemed.  Being able to personalise messaging will make it more relevant and clients will be more likely to engage.  If you send someone a discount after they have just purchased the same item, it has a higher propensity to irritate them.
  4. Test it.  Ensure that you clearly explain to the customer and your staff what your new proposition is and how it benefits them – put your customer at the heart of everything and think about what they want first, before your own revenue goals and ambitions.  Make the mechanism of redemption clear and simple;  take on board their feedback and adjust accordingly.
  5. Analyse.  Continually analyse if the programme is working, is it generating more revenue for you or is it simply diluting the revenue you would have generated anyway?

If this sounds like something you would like to put in place to help increase your customer engagement and increase business revenue for 2020 – please get in touch to see how we can help.


Sophie Comas

A highly successful self-motivated and results driven, senior marketing professional. My passion lies within developing and delivering marketing solutions which make a difference in today's complex digital market place. A marketeer with a strong academic background and broad ranging level of experience working with small businesses and in the travel and hospitality sector, across the Thames Valley, I love a challenge!

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