January 17, 2018  
 
Gaebler.com is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

Articles for Entrepreneurs

 

Marketing Ideas

 

Customer Loyalty Programs

How are your customer loyalty programs doing? Customer loyalty is key to business growth. After all, keeping an existing customer costs far less than acquiring a new one.

Finding new customers is important, but unless you are able to retain those customers it's unlikely that you'll be able to achieve the bottom line you need for significant growth in your business.
(article continues below)

Customer loyalty programs can go a long way toward helping you improve customer retention because they provide a low-cost incentive for existing customers to continue buying your products and services.

Customer loyalty programs come in a wide variety of shapes and forms. It's up to you to decide which one is right for your business. With that in mind, here are some of your options:

1. Prepaid Discounts

Prepaid discounts offer customers a reason to buy a certain amount of product or services in advance. For example, a bagel shop could run a baker's dozen discount, offering customers a punch card good for thirteen bagels. The cost of the punch card would be equivalent to the normal price of a dozen bagels, thus rewarding the customer with a free bagel for buying twelve in advance.

2. Buying Level Discounts

Buying level discounts are very similar to prepaid discounts with one difference - instead of being rewarded for buying products or services in advance, the customer is rewarded once they reach a certain level of purchasing. Going back to our bagel shop example, the customer would still use a punch card. But instead of paying for a dozen bagels in advance, the bagels would be purchased as needed and the free bagel reward given after the punch card has been "filled" - indicating that the customer has reached the twelve bagel threshold.

The disadvantage of buying level discounts is that they have become so commonplace that many people won't participate in them simply to avoid cluttering up their wallet or purse. The key is to make the reward enticing enough that they can't refuse.

3. Membership Programs

Some retailers have been very successful at using membership programs to attract and retain customers over a long period of time. Membership-based retail operations (think Sam's Club and BJ's) leverage their buying power to offer discounted prices - but only after the customer has demonstrated his loyalty by becoming a member. Admittedly, membership-based retail is not right for every business. But you might want to consider offering a membership discount option as a way to reward committed customers.

4. Upgrades

Upgrades are another cost-effective way to reward customer loyalty. In most cases, the costs of upgrades are negligible compared to the feelings of goodwill they create in your customers. Airlines have been using upgrades for years, offering passengers a bump up to first- and business-class as rewards in their frequent flyer programs. These upgrades don't cost the airline anything since the number of people paying full fare for the better seats is rarely enough to fill them. However, by using upgrades as a reward, the airlines are able to keep their customers coming back time and time again.

Related Articles

Want to learn more about this topic? If so, you will enjoy these articles:

Designing Effective Direct Mail Promotions
Six Great Tips for Collecting Customer Testimonials
Mistakes to Avoid When Building Customer Loyalty Programs
Tips for Getting Customer Referrals
How to Improve Customer Service


Conversation Board

We greatly appreciate any advice you can provide on this topic. Please contribute your insights on this topic so others can benefit.


Questions, Comments, Tips, and Advice  Code Image - Please contact webmaster if you have problems seeing this image code
Problem Viewing Image
Load New Code

 

 

Additional Resources for Entrepreneurs

Search Engine Marketing

Social Marketing Optimization

Business Forms

Business in the Jungle - Business in Fiction - Negotiating

Radio Ad Costs

Newspaper Advertising Rates

City-Specific Resources for Entrepreneurs

Small Business Insurance

Global Entrepreneurship

China & Entrepreneurs