Attracting new customers is an uphill battle some days. Not only must you stand out from your competitors, but you have to compete with a hundred other things vying for the consumer’s attention. Loyalty programs are one way to grab those customers and pull them into your brand’s message.

Eighty-one percent of consumers say loyalty programs keep them coming back to a business time and again. In the movie “Up in the Air” with George Clooney, the main character focuses on reaching 10 million frequent flyer miles and gaining access to a special card that would give him perks. Airlines are famous for providing frequent flyer perks to their customers, and this benefit alone can make someone loyal to one brand over another.

Types of Loyalty Plans

There are a few structures for loyalty programs. Not all loyalty programs need to be exclusive, although some are, which creates a community of sorts among your most loyal customers. For example, loyalty cards from chains such as Dunkin Donuts are available to anyone who asks. There are no special requirements or invitations to join those programs.

Programs can offer a free item after a certain number of purchases, perks for referring friends and family, special events for A-list customers and even preferential treatment like Clooney’s character sought. Think through the structure of your program and make sure you are providing something of value to your customers, while keeping it affordable to you as a business owner. There are many benefits to using loyalty programs for your business. Here are 10 to consider.

1. Retain Customers

The cost to gain a new customer is five times more expensive than retaining a customer you already have. Create a loyalty plan for your most avid customers, and they’ll be likely to return to your business in the future. This strategy includes things such as buy five coffees, get one free, and similar rewards. You can use a simple punch card or create an app for your loyalty program.

2. Create Raving Fans

The last time you got a fantastic deal, didn’t you want to share it with everyone you know? Loyalty programs are something your customers can get excited about. In turn, they’ll tell others about the good deals they’re getting or the little extra perks you’re giving them for their ongoing business.

Chick-fil-A has an interesting take on a loyalty program. Instead of offering it to everyone, they make it secretive and exclusive. You have to get invited into the program, after which you’ll receive a loyalty card. You can then register for their “A-list” and get benefits such as private kitchen tours, special dinners and free meals.

3. Collect Data

Knowing what your customers like and their preferences allows you to customize the experience and better manage inventory. As soon as your customer signs up for a loyalty program and uses that information to make purchases, you can track those items to that customer. You’ll even figure out people’s favorite colors, styles and price ranges based on this information.

4. Show Customers They’re Special

Do you have those few customers who come in without fail nearly every day of the week? Perhaps they send you new customers weekly and tweet about your business. Whatever their level of involvement, create an exclusive program for your top customers to let them know how much you appreciate their support of your business. This loyalty program should be unique and not available to just anyone. It can be separate from a more basic loyalty program.

American Express Centurion Card, also called the American Express Black Card, is an exclusive card that is also by invitation only. The Centurion card is limited to those with big budgets, and comes with correspondingly big perks. The initiation fee of $7,500 and an annual fee of $2,500 put this card out of reach for many. However, you’ll gain benefits such as no foreign transaction fees, rewards points on purchases and one and a half times points on purchases above $5,000.

5. Market Inexpensively

Adding a loyalty program for your customers is an inexpensive way to encourage engagement. Let’s consider the most basic of loyalty programs. After buying 10 items, a customer gets one free. Because you can spread the cost of the free item across 10 purchases, the cost for you is only 10 percent of sales. Consider, however, the person may buy more than they usually would to reach that reward level.

6. Make Customers Feel Valued

We’ve already discussed how crucial it is to retain customers, because it is cheaper to retain a current customer than to secure a new one. One way to keep current customers engaged is to make them feel valued. You can achieve this with a loyalty program. For example, collect important dates and recognize them with a freebie or at least a card.

Bearno’s Pizza offers a loyalty program for its customers. Sign up, and they’ll send you a $10 gift certificate for your birthday, no strings attached. You’ll also periodically receive exclusive coupons and reminders of special events, such as live bands performing at their restaurant.

7. Smarter Displays

Tie your incentive program with an app, and you can produce a digital display aimed at a specific customer as they walk into your store. When the customer walks within so many feet of your store, it activates the app to change the display.

If you want to see an example of how this works, Disney World in Orlando uses this type of technology for some of their rides. In their case, they use the Magic Bands park visitors wear. As you walk through a line for a ride, digital displays greet you in various ways, even using your name and where you’re from.

8. Keep Customers Happy

Who doesn’t love to get something for free or earn a reward? One way to keep your current customers happy is to reward them for being your customer. That might include rewards just for coming in the store, as well as rewards for purchases. Yes, some people will take advantage of the free points, but others will buy items, so the program tends to balance out.

Topps has a generous reward program that gives customers points just for sharing information as well as purchases. For example, you earn a point for every dollar you spend if you are a new customer. As you order more, you rise up the ranks and earn more points for every dollar you spend.

Once you’ve earned 501 points, you earn two points for every dollar you spend, and once you earn more than 2,000 points, you earn four points for every dollar you spend. You get 100 points just for joining the Topps Now loyalty program, 200 points on your birthday and can even earn points for liking or sharing about their brand on social media.

9. Reinforce Your Brand’s Values

As a brand, what are your values? If you believe in helping new moms afford products to pamper themselves, your loyalty program should reflect that value. If your company believes in living green and protecting the environment, your program might involve planting a tree every time someone makes a purchase above a certain amount.

10. Improve Goodwill

Connecting with new customers isn’t always an easy process. However, 64 percent of retailers say their loyalty programs are one of the best ways to connect. Any time you can improve the goodwill between your business and your local community, you improve your reputation and the way your customers feel about the value you offer.

Encourage Loyalty

Anything you can do to turn first-time customers into raving fans helps build your brand. Instead of always seeking new customers, you cultivate the customers you already have, and keep them coming back for more. This tactic works particularly well with consumable products that need occasional replacement.

The more a customer loves your brand and appreciates what you have to offer, the more of their friends they’ll tell. Word of mouth alone can grow your business from a struggling startup to a well-oiled, money-making machine.

Buffer

About the author

Lexie Lu

Hello! My name is Lexie and I have a fervor for design, writing, and coffee. I graduated with a dual major in Creative Writing and Commercial Design, and through those grueling study hours (facilitated by coffee, of course) I always found time to write for myself.

My posts feature design trends throughout all industries and show how the field is always changing. There’s never a dull moment in the design world!

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.