How To Start a Loyalty Program For Small Businesses?

We believe that you must have several membership cards for different brands, be they in your wallet or App Wallet on your phone.

Brands are paying more and more attention to Customer-Relationship-Management (CRM) systems these days as attracting new customers is at least five times more expensive than retaining current ones.

The cost of acquisition is even higher for brick-and-mortar shops during Covid-19 pandemic when most of the people stayed at home, and therefore, to launch a loyalty program is the way to nurture recurring customers and boost sales effectively in the long run.

Yet, is starting a reward program cost-effective for small brands? It doesn't have to be hard indeed. Here’s how.

4 Steps to launch a loyalty program

1. Determine your program structure

First thing first, you need to know your product, service and your customers well so as to define how the program works. Ask yourself the following:

  • What do your customers like more? Points or purchase threshold structure?
  • Is it necessary for your brand to have consumer segmentation i.e. single-tiered or multi-tiered?
  • How can your members earn rewards? Free delivery? Discounts?

Only when you have a clear program structure shall you proceed to the next step as it’s not easy to change the mechanics when the program starts to run.

2. Find the right platform

As a small business owner, it is likely that you can’t justify the cost associated with a bespoke platform like what other giant brands do.

Still, you can choose from some of the most popular loyalty softwares tailored for small businesses such as Fivestars, Candy Bar, Loopy Loyalty, etc.

These softwares have different characteristics. For example, Loopy Loyalty is preferred when you plan to set up a digital stamp card for your members.

When it comes to making the decision, please consider the setup costs, ongoing costs and whether it’s user friendly for both customers and your team.

On the other hand, it is crucial to maintain your own database, say using the Excel spreadsheet upon member data collection can be another alternative if you just want to keep the program as simple as possible.

3. Define the registration requirement

Below are some common ways to consider when it comes to member registration:

  • Stamp card
  • Membership card
  • Phone opt-in
  • Online registration

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Choosing more than one registration method is strongly recommended in order to increase your program exposure.

For example, you can implement online registration on your site while allowing the phone to opt-in to your POS.

While you are thinking about what information to collect during registration, it’s worth taking consumer’s experience into account as most of the consumers are impatient to fill in a long sheet even when there are perks to register.

4. Launch and market the program

When the above is all set, it’s time to launch and promote your rewards program.

You are recommended to leverage all online channels that you have access to such as your own website, social media and eDM to market the program.

If you have a retail store, it’s of paramount importance to train your staff about the program. Indoor signage is recommended with a hook for customers to register.

That’s how to set up a loyalty program for your business. Sounds easy, right?

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Final Thoughts

It’s not uncommon for brands to set up a loyalty program but do nothing afterwards, which is a great waste of time and resources.

In order to retain the database, you have to plan the member acquisition tactics to enhance your member base and member engagement strategies to augment member retention.

Afterall, a well-planned customer journey determines the success of your loyalty program.

Any thoughts for now? Feel free to get in touch via [email protected] as we would love to help you incorporate the right marketing communication strategy.

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