According to the Local Commerce Monitor study, nearly 25 percent of local businesses have a customer loyalty program. And another 29 percent are likely to start one this year. What do they know that you might not? A customer rewards program can be an effective way to grow your business. The secret is incenting existing customers to come back and buy from you again. Learn more about customer rewards programs and why more small businesses are using them.
Customer rewards programs work off the principle that people will repeat their behavior if they are rewarded for it. It’s the same reason children will do their homework first so they can earn time on their electronics. So, if you want customers to shop at your business, entice them with a reward so they come back.
A reward (or loyalty) program can be structured in many different ways. An ice cream store might punch a card every time you buy a cone. Once the card is full, you get a free cone. Other businesses may have a more sophisticated system of credits for each purchase that later can be redeemed for merchandise, free shipping, or first dibs at an upcoming sale. Think of them as frequent flyer miles for your business.
Some businesses find that the cost of these programs may be offset, in part, by savings. That’s because you’re not incurring new customer acquisition costs, which can be 3-10 times higher.
Customer rewards programs have been growing in popularity. In fact, the average U.S. household belongs to 21 different programs. But here are some facts you may not have heard:
A customer rewards program can be an effective way to grow your business by increasing your brand loyalty among current customers. Consider these factors to determine whether you should start one for your small business.