The complete guide for creating the best loyalty program for SMB’s
Most SMB’s have the same basic goal – to increase their income. If this sounds right to you, a good loyalty program can help you increase retention, sales, and revenue.
It takes much of your time and budget to attract new clients while retaining clients is the best course of action and much more rewarding.
Whether you are an online or a physical business, creating an attractive loyalty program is the easiest way to retain this.
What is a loyalty program?
Loyalty programs are one of the best marketing strategies to help you increase your revenue. It is your way of rewarding client (mainly existing, but also new clients) for returning business and giving them incentives to keep doing so.
Creating value for your clients, increases their loyalty, brand recognition and how likely they are willing to recommend your business. As a result, you are more likely to increase your business and succeed.
How do loyalty programs work?
Loyalty program elements reward clients for taking action (such as consume a product or service, order, share, or book a meeting) directly within your business.
Elements of a loyalty program can be:
- Loyalty cards – buy one get one, buy X get a discount, or a reward, to promote new and hard to sell products/services. You can tailor these cards to fit clients’ purchasing needs and preferences.
- Points System – clients get points with each action they take to be redeemed in their next purchase.
- Loyalty tiers – rewards frequent clients even more as they move up the loyalty tier.
- Cashback system– clients can earn money back for their purchases towards the next purchase.
- Coupons – a highly competitive sales tool to encourage customers to buy more and promote new and hard-to-sell products.
- Exclusive MembersClub – clients get special benefits, products or services for being part of a paid loyalty program.
The many benefits in creating a loyalty program
Loyalty programs can save you a lot of time and money. But more than that, it increases retention, attract more clients through word of mouth and increase sales as it converts better. Another great reason is to make clients feel even more appreciated and give them that little push to continue using your business, shopping at your store or interacting with your brand.
If done correctly, using a loyalty program may boost your profit by at least 25-50%.
How to start?
People truly enjoy loyalty programs and love getting rewards and collecting points.
In order to create a loyalty program that works and will attract clients, you need to make it as simple as possible for the clients to use. It needs to be clear what your clients get, and for what action. Also make sure the reward is something they actually want and need such as discounted items, free shipping, coupons or anything that makes sense.
6 Steps for creating efficient loyalty programs:
So, you understand what loyalty programs are, how they work and why you need them. You need to be very strategic about how you create and promote them and
If you plan it well, you can gain clients’’ loyalty, as well as revenue.
Here are tips for creating a loyalty program that actually works:
Step 1: Research about what your clients need
Take a step back and look at your customers –
- How much money do they spend each month or even over the years?
- What are they purchasing?
- What are the most popular items and services?
- What items are most likely be bought together?
- Are there any similar items that might interest them as well?
- What are the common characteristics of your clients?
- How can you take advantage of the information you gathered to grow your business?
Step 2: Set goals
Think about what you wish to achieve with the loyalty program – brand awareness, increase sales and retention, promote new products, or just keep your clients happy.
Once you start creating your plan, make sure you have clear goals and that your loyalty program meets these goals.
Step 3: Create a plan
Once you finalize your research and have all the answers, you are ready to begin.
Based on your finding, create a detailed program of the rewards – map your products/services, based on popularity and the rewards your clients most favor.
Try to use the rewards to promote new or hard to sell items, but at the same time take under consideration your clients’ preferences.
Step 4: Set up a budget
Set aside a budget to fit your business goals. Try to get a clear budget plan of how many rewards will be granted, the cost and the return on the investment (the ratio between the net profit and cost).
Step 5: Create an action plan
Set a timeline for the loyalty program, the term of use, and channels you will use to promote the plan – in social media, in your business location (with QR code, flyers, signs), your website, push notifications, email blast, word-of-mouth and so on.
Step 6: Analyze the results
Ensure the loyalty program are up to par with your goals and get you the results you hoped for. You can analyze the data from your program to how sales and retention increased, how many clients claimed the rewards, and the increase in returning business. You can also create surveys to determine how satisfied your clients are with the rewards and what to improve.