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How To Create A Customer Loyalty Program For Your BusIness




It’s one of the most cited statistics in the business playbook: 80% of your venture’s profit will come from 20% of your existing customers. Loyal customers are your most valuable customers, which is why many small business owners go above and beyond to incentivize their customers to return time after time. A loyalty program can improve customer retention, bring in more positive customer reviews and build the kind of brand loyalty that can help you sustain the business through a recession. Here’s how to set up and run an effective customer loyalty program.

[Read more: Customer Loyalty: What’s Love Got to Do With It? A Lot]

Design your program around a goal

What’s the customer behavior you wish to incentivize? Design your loyalty program to reward your customers for taking a specific action. For instance, if they visit your cafe for a coffee four times in a month, the fifth coffee is free. This encourages more frequent visits, bringing in foot traffic and increasing sales.

Here are the main goals your loyalty program might help you accomplish:

  • Increased spend: make each transaction more profitable.
  • Frequent visits: encourage customers to make a purchase more often.
  • Market research: use your loyalty program to learn purchasing habits, solicit feedback and test new products.

There’s a fairly easy way to determine which is better for your business. If your venture is a low-ticket business, such as an ice cream parlor or a cafe, choose to incentivize frequent visits. If your business is a boutique or another place with more high-ticket items, use your program to encourage higher spend.

Points vs. perks: Choosing a structure

There are a few ways to structure your loyalty rewards:

  • Punch card: Great for businesses trying to encourage frequent visits, the punch card is a simple, low-cost way to reward loyal customers. The downside, however, is that you rely on customers to remember and keep track of their cards, and… Read More


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