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A customer loyalty program is a marketing tactic designed to encourage customers to become repeat purchasers or engage with a brand on a recurring basis. A business may give points, like the Qantas Business Rewards program, or other incentives, and move customers to different tiers of loyalty, the more they buy.
These incentives and benefits often result in the customer becoming a regular customer, increasing retention rates (in marketing speak) or even better, a brand advocate! Incentives may involve free merchandise, rewards, coupons, or insider/VIP deals like early access to new products.
Small businesses who are struggling with cash flow or profitability may hesitate before looking at giving away freebies to prospective leads or customers. However, a customer loyalty strategy can start with a relatively low investment. Throwing in an extra small product or service with purchases is an excellent way to reinforce a buying decision your customer just made. Everyone loves receiving something for nothing. And for every cent a business spends investing in a customer loyalty program, it is likely to reap the benefits of a loyal customer base who will share their experience with friends.
The annual For Love or Money report[i], a representative survey of over 1000 Australians from First Point Research and Consulting , found that 89 per cent of Australian adults are enrolled in at least one program with the average number of memberships at 4.3 per person, and over half (59 per cent) of members reporting a brand or business needs a program in order to help maintain customer loyalty.
The report also found that members are focused on the benefits a program offers, with 62 per cent of those surveyed reporting they take advantage of most of the rewards and benefits available through their programs. Millennials are even more motivated to make the most of their memberships, with over half (68 per cent) indicating they use program rewards and benefits.
Clearly, there is an appetite for loyalty programs among Australian consumers. To take advantage of this marketing tactic, here are several ideas that you can easily implement within any size business.
If you run a retail business, restaurant, or coffee shop, handing out a punch card is a simple and cost-effective solution. Each time a customer visits and makes a purchase, you can mark this on their card. Once a customer reaches a certain number of purchases, they are rewarded – whether it’s a free coffee or a discount on their next purchase, it’s an incentive to purchase from your business again and again.
The conventional “punch card” has also been translated into various points systems, so once a customer reaches a specified point count, they can “cash in,” and redeem a reward.
For those who prefer a paperless or technology-based approach, you might want to try a loyalty software platform, like Rewardle or Perkville, that allows customers to track visits and discounts online. These mobile-first platforms allow customers to store the card in their virtual wallet, to track their rewards points and often offer integrations with multiple vendors.
Membership programs add another layer of personalisation to your loyalty marketing strategy, as an evolution on the “punch card” approach. Each time a customer visits your business and shows their card, they earn points, get a discount or added perk. Again, the size of the reward doesn’t necessarily matter,it’s the perception of receiving added value that others are missing out on. Plus, you can personalise your marketing based on the member profile data, providing surprise and delight opportunities at key moments like birthdays or anniversaries.
Most small business owners use email and social media as the key channels to reach their current customer base or to nurture/acquire prospective leads. With a customer loyalty strategy in place, you can incentivise existing customers to subscribe to your email base or follow your social media accounts with the offer of first access to sales, members-only discounts and VIP events.
Winning the loyalty of your existing and prospective customers doesn’t need to be a difficult or expensive venture. Every business is different, and fortunately, there are a wide variety of loyalty program options available to suit your business and its unique needs to get your customers on board.
To find out more about how Bizcover can reward your small business with Qantas Points, check out our launch offer here.