Incentive Schemes – how small businesses can reward loyalty
Incentive schemes for businesses where loyalty matters!
Customer loyalty incentive schemes are nothing new. The big supermarkets and high street retailers are among the market leaders and with more store cards than we can shake a stick at, our purses and wallets are bulging as a result.
If you’re not one of the big hitters but still want to reward your loyal customers, how do you do it?
Is there an affordable customer loyalty incentive scheme out there for small businesses?
Why is customer loyalty so important?
The chances are, your business isn’t the only one offering a service or making a particular product.
If it is, then congratulations.
For the rest of us, building a loyal customer base is vital.
It’s easy to focus on finding new customers because you want to grow your business. But forget your existing customers at your peril.
Here are 4 good reasons why you should make an effort to keep your customers loyal:-
- They are more open to new products and services
In fact, the Gartner Group found that 20% of your loyal customers generate 80% of your profits.
So, customer loyalty is important.
If you have existing customers who are loyal, they’re more likely to trust you, and your products and services.
- They are more likely to recommend you
Lots of small businesses grow thanks to recommendations from existing customers. In fact, a study by Neilson found that 92% of consumers trust recommendations from people they know.
It’s not surprising really.
We’re social creatures and we like to share our experiences. If we’ve had a great meal or a bought a great new sofa, then we’ll tell people. That also works the other way though; provide a bad product or service and expect people to tell everyone they know about their
Linked to this, is leaving good feedback.
If we’ve bought a product from somewhere once or twice, we’re unlikely to go out of our way to leave good feedback on a website or on social media. If we’ve been using a local hairdresser for a while though, we might comment positively on social media.
- They are more likely to stand by you in challenging times
Ifyou had a problem with one of your products, a new customer might not re-purchase from you.
If it’s a loyal customer though, two things are likely to happen.
The first is that they’re more likely to tell you they thought the quality wasn’t as good.
The second is that they’re much more likely to give you another chance. In a competitive market this is really important.
When times are tough, having a loyal customer base is vital to keep your business going.
4. They are more likely to pay more for a superior product or service
In a challenging market, it might be tempting to reduce your prices to match or beat your competition. That’s all very well for a one off or for a short period of time, but it’s not a sustainable business model.
If you’ve spent time building a strong customer base, you don’t have to be forced into cutting prices like the competition. If people are already satisfied with what you have to offer, chances are that they won’t switch to a business offering cheaper rates, because they already trust you.
Customer loyalty incentive schemes for small businesses?
So what are customer loyalty incentive schemes or programmes?
Essentially, it’s an incentive scheme offered by a business to reward frequent customers.
It’s usually done using points or coupons in exchange for making purchases or using a service. The goal is to give loyal customers a reason to come back to a business and make repeat purchases.
As a small business, how can you give clients a loyalty scheme that won’t break the bank?
One option, which could work well if you’re in the retail or service sector, is a loyalty card.
Cheap to print, you give customers a card which entitles them to a free blow dry after five full-price haircuts. You just need to stamp the card each time.
The downside of this idea is that you’re not holding any customer details. If you run a café, you hand the card out and you have no way of building an on-going relationship with them.
The other option is a digital loyalty scheme, managed by a third party. There are a number of providers out there but one of the most popular is Swipii.
It gives you a bespoke customer loyalty programme, an app or cards and a scheme which can be signed up to within 10 seconds.
You can even get help with direct marketing and access useful insights into your customers spending habits.
You can reach new customers too by offering discounts to people in the local area who have the Swipii app.
Using Facebook and other social media channels can work too.
You could encourage people to recommend you to a friend or leave feedback in exchange for a discount on a future product.
If you’re launching a new product, offer it to your existing customers first. If you’re going to start a new yoga class, give your existing and loyal customers first refusal and maybe a discountfor attending the first class.
There are lots of ways you can make your customers feel valued.
Focusing on providing a good product or service that people want to use has to come first.
We all value loyalty
At THP, we really value our clients and love finding out about their businesses.
If we can help you to grow your business or see ways to make improvements then we’ll be sure to let you know.
Of course, we love meeting new people too.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.