Why Small Businesses Need Customer Loyalty Programs
The philosophy behind a customer loyalty program is simple. Repeat customers are rewarded and businesses increase sales. It’s a basic but powerful strategy. Whether the goal is to continually increase sales or to jumpstart sluggish revenue, customer loyalty programs appear to have become a staple for many large corporations.
But what about small businesses? It’s important for business owners to keep in mind that customer loyalty isn’t just for big businesses. A well-designed loyalty program can help any size business scale and reach new heights.
Here’s why customer loyalty programs matter to small business.
A repeat customer gives and gives
Having a customer loyalty program could help you increase repeat customers, which in turn could boost your business’s revenue. A repeat customer spends 67 per cent more on a given purchase than a new customer does. So they should be rewarded for this action, as retaining customers is less costly than acquiring new ones.
By providing loyalty programs for current customers, small business owners are not only saying “thank you” but are also motivating them to continue to be their brand ambassadors. They can easily spread the word about a business to their professional, personal and social networks, helping small business owners increase their customer base even more.
Rise above the competition
It can be difficult for a small business to compete with a large brand considering that most large brands have more locations, resources, marketing dollars and the ability to offer lower prices.
However, a good customer loyalty program is an easy way for small businesses to show their personal side and remain competitive in spaces dominated by big business.
For example, many consumers may not love the coffee at a big brand coffee chain but do love the fact they can earn points through their purchases and save money in the long run. However, it would be very simple and cost effective for a small coffee shop owner with quality coffee to do the same.
Customer loyalty doesn’t cost a fortune
Customer loyalty programs don’t have to drain small businesses’ budget. While some corporations spill millions of dollars into loyalty programs, small businesses don’t have to follow the same tactic to achieve promising results.
In today’s mobile era, cost-effective digital rewards programs are just as fruitful as the ones put in place by bigger players. Small business owners no longer have to waste time and money printing cards and buying ink when they are using digital customer loyalty programs. More importantly, they’re making it easier for their customers to keep using their service.
SOURCE: Entrepreneur
