Loyalty Programs for Even a Small Business

Customer retention

Artem Daniliants

4 min read

Think you can’t afford to create a Loyalty Program for your small business? Think again. Using this guide I’ll break down what a loyalty program is, why you should have one, and how to do it affordably. Now let’s jump right to it:

What is a loyalty program?

A Loyalty Program is a marketing strategy that strengthens the relationship between and business and it’s customers by encouraging them to return.

Basically, the main focus of a loyalty program is to create loyalty (seems fitting doesn’t it?) To fulfill that goal, you want to create a relationship where the customer comes back to you for the product or service you are selling.

Let’s come up with some examples

It’s lunchtime, and you’re looking for a quick, tasty lunch near your office. After walking around, you find a new Chinese food restaurant around the block. Who doesn’t love noodles? After paying and enjoying your Ginger Beef the waiter hands you a punch card.

Coupon for free drink

What a steal, surely you’ll come back, right? That’s an example of a simple loyalty program you’ve probably seen at a local coffee shop or restaurant. Even I have far too many of them in my wallet… While that’s good and simple, nowadays there are much more elaborate and complex versions of this.

Let’s take a look at a more complicated one. You’re up far too early and you need a cup of coffee. Pulling up your phone, you find a Starbucks nearby. Perfect. After walking in you see a lot of banners promoting their new app to collect rewards.

Join today! Every time you buy something, collect points and claim rewards. Order ahead of time on the app and pick up your coffee right away! Pretty convenient, right? That’s a more complicated version of the same punch card. Only now, it’s virtual and no longer taking up space in your wallet.

Alright, so the next question is why you should have it and there are three major reasons.

Why You Need a Loyalty Program

First, this builds a relationship with your customers. If you give your customers a good benefit, then they are likely to let their friends know about your program and products. It’s common knowledge that word of mouth is the best kind of advertising.

Next, a loyalty program increases your sales . According to one study, Returning customers spend much more than new ones. You’re much more likely to sell something to someone who is already interested in your product.

Finally, it provides information on your customer’s buying habits and needs. Obviously, you don’t want to stalk your customers, you’re just using the information that they provide on your website when they sign up. Things such as what products are popular, what price range is most popular when they abandon their cart, and so forth.

Alright, so that’s all good, but how do I actually make one?

Surely it’ll cost way too much money to hire a team of developers to make an app for my small business! While historically that was the case, there are now tons of plugins for your website. With a small investment of anywhere from $150 to $200 you can create a loyalty program.

What Tools Do You need to start a Loyalty Program?

Let’s look at a company called Chocolala . It’s a chocolate company with a great Loyalty System. Just for signing up, you’ll save 5% on everything on the website. Great, let’s sign up and see the deal in action!

Chocolala Loyalty System

Chocolala uses a platform called WooCommerce. Lots of useful plugins can be incorporated and combined to work with WooCommerce. After installing these inexpensive plugins you can make customizations like what you’re seeing in the GIF above this paragraph. WooCommerce Role Pricing is the plugin you would use to accomplish that. For only $79 per year, you can use this extension and all its perks.

You can also see lots of different perks when you go into the rewards section. All these different options also allow the customers to pick what they want and have different options. Obviously, more points leads to more rewards. When purchasing chocolates you get their choco points (not to be confused with a Chocobo).

Once you’ve got a customer email address you can also combine this with Active Campaign . This allows you to start email marketing and further engaging with your customers. Now, we don’t want to bombard everyone, so be sure you’re only sending emails that are relevant. The pricing depends on your business size and needs, but it can also be quite affordable.

And there you have it. That’s how loyalty programs work and why they’re important. Now go forth and use this information to start your own loyalty program for your customers!