There’s a reason loyalty programs are everywhere – they work! Though if you’re wondering whether or not you should start a loyalty program at your small business it’s worth taking a pause to consider the pros and cons before you start printing out cards.
Small Business Loyalty Program Basics: The Pros, Cons and First Steps
First, the cons.
Loyalty programs aren’t free, regardless of how much of a bargain you might be able to get on the tools you need. Loyalty programs cost time – the cost of coming up with the idea, figuring out if it will work or not, getting other people (employees, customers, etc.) up to speed, and making sure the program runs smoothly.
Add up the hours, multiply it by the hourly rate of everyone involved, and you’ve got a starting point for how much a loyalty program costs.
Moreover, there’s no guarantee that you’ll get that time and money back, or that the program will give you the results you expect.
Like the first sentence in this post says, loyalty programs are everywhere. And that means your competitors probably already have one. Does the world really need another loyalty program?
With so many programs out there, your customers might choose to just opt-out because they’re just so loyal (albeit, to nearly everyone else). Though if you’re up for the challenge, this could give you an opportunity to create a truly creative and simple loyalty program.
Undeterred? Great! Now the pros.
Loyalty programs are generally feel good programs – you feel good because you have a way to encourage customers to keep coming back, and they feel good for being rewarded for being a loyal customer.
Again, like the first sentence says, loyalty programs have been proven to work. The logic is pretty simple – having a loyalty card or being committed to a loyalty program is a huge incentive when it comes to picking one retailer over another.
This next point might be truer for some loyalty programs than others, but overall, having an opportunity to interact with your customers beyond just a financial transaction could go a long way towards you building a relationship with your customers.
A loyalty program gives you an opportunity to find the keeners: those customers who will go beyond signing up for your newsletter and program, and who will turn into ambassadors for your company. Think of it as the first step to you creating your own insider club.
The opportunities are literally endless with loyalty programs. Chances are, if you’re thinking about starting a loyalty program, some – if not at least one – of your competitors already have a head start. This isn’t reason to get discouraged. With loyalty programs, you have an opportunity to stand out from the crowd and edge out the competition.
Just look at the sometimes weird and wacky world of Frequent Flier programs. Because competition is so high, some airlines have pushed the boundaries of what you get for being a loyal customer, like offering an Inflight Marriage Proposal Kit or a pizza walking tour of Manhattan.
How to Begin
Do your research. Look at what your competitors are doing, what makes sense for you and your business, and what’s in your budget.
- Get creative. Think of ideas – poll your friends, family, clients and customers or take a weekend to brainstorm something that gets you fired up.
- Take your time. At this stage, if you’re not committed to a loyalty program you can really take some careful steps. And if you decide not to start a loyalty program, it’s no loyalty lost.
- Take your time. At this stage, if you’re not committed to a loyalty program you can really take some careful steps. And if you decide not to start a loyalty program, it’s no loyalty lost.
