Business Tips

The Essentials of a Successful Loyalty Program for Small Businesses


The coronavirus pandemic has changed almost everyone’s shopping habits. Studies have pointed out that the crisis forced several buyers to try products from different brands and retailers. The quality, availability, and value of the product were the factors that influenced consumers to buy from other manufacturers instead of the usual ones. Thus, these days, companies need to encourage consumer loyalty for retaining buyers. This is where loyalty or rewards programs come into the picture.

What’s a loyalty program? Can it prove to be effective in retaining consumers?

As a part of a loyalty program, businesses offer special discounts, rewards, or other incentives to customers who frequently engage with the brand.

Research suggests that 72 percent of the American population is a part of at least one loyalty program. Such initiatives can drive sales, increase retention, and help in staying ahead of the competition. Here’re tips for developing successful loyalty programs that can work for a small firm.


Every customer’s pain points are different, and so should be the loyalty benefits offered to them. Thus, using customer insights for offering unique rewards to each consumer can be a good idea.

Customers are often clear when it comes to their expectations. Some of them expect a special discount, or free products for frequently ordering, while others may appreciate a free delivery. It is advisable to listen to them and cater to their unique demands via loyalty programs. Offer them something that’s exclusively available for them in exchange for a small annual fee.

Incentives should not hurt the firm’s bottom line

Small businesses often have limited budgets for everything, including loyalty and rewards. The incentive for the program should be valuable and sufficient enough to make the consumer feel special. However, it should not damage the company’s bottom line. Loyalty software can help businesses create tailor-made offers for every customer after analyzing past and present transactions related data. It allows firms to design unique rewards suggestions for consumers while keeping control of the budget at the same time.

Personalization is crucial

High-end customers altogether have a different set of expectations. Companies provide them with access to dedicated customer support. And of course, they need to be enrolled in loyalty programs. But, besides rewards, high-end-buyers would also appreciate a thank you note. A gift on the next purchase, along with personalized notes on special occasions like holidays or birthday, can do the trick. 

Software solutions, like a loyalty management platform, can help the organization in flagging such consumers, tracking their interactions, and ensuring they get a personalized treatment.

Help consumers understand your programs and benefits

In-app advertising can help in directing customers towards your program. Let agencies that specialize in in-app advertising manage your campaign. Run ads about your program in some of the most used applications in your town.

If your business has a storefront, the old school idea involving the distribution of printed flyers can work. If you offer door-step delivery of products, slip flyers, or a notecard in the shopping bag with details for the loyalty program. Provide a barcode that can help customers download the loyalty programs app directly and enroll.

Paid programs need better marketing and dedicated human resource

If a customer needs to buy a membership to enroll in a program, there’s obviously a lot of convincing to do. If they are paying annual or quarterly fees, the benefits or rewards must be worth more than the membership cost. For example, people opt for Amazon Prime (paid program) because they get access to video content, free shipping, and quantifiable rewards.

If the business plans to launch a paid program, it needs to ensure customers understand all the benefits. Running digital, mainly content marketing campaigns to spread the word, is even more crucial for paid programs.

Abandoning a program without notice can be a bad idea

Several customer behavior studies have highlighted that dropping a rewards program without prior notice can disappoint consumers. It triggers a high level of dissatisfaction.

Small businesses often start programs that they fail to sustain for a longer time. So, it is always better to be realistic about the budget and human resources the company can afford in the long-term. Experts recommend firms start small and enroll repeat customers in the initial stage. Then, launch the program for other consumers depending on the feedback.

Reward points for charitable causes

Several firms offer reward points to consumers on every purchase and then allow them to use points for donating various items to people in need. Some firms also allow consumers to earn vouchers and distribute the same as a part of a local or national charity. Younger buyers often appreciate such initiatives. Overall, consumers prefer doing business with companies that believe in doing something for society, especially during the pandemic.

Are such initiatives important?

Recognizing and rewarding consumers for their repeat business is crucial, especially during and after the pandemic. Surveys suggest as many as 60 percent of customers prefer joining a program from brands that they appreciate.

What kind of loyalty software should small businesses choose?

The cloud-based software should be scalable and have optimum security features for ensuring data security. It should easily integrate with the firm’s existing IT infrastructure, including databases. Adding unique customizations should be easy. Put simply; it should offer a unique mix of flexibility, affordability, and functionality so that small businesses can manage loyalty programs smoothly.

Author bio

Shobhit Srivastava is a content marketer at LoyaltyXpert, a loyalty management platform company in India. He holds spectacular skills in loyalty programs, marketing, and customer retention. Connect with him on Twitter

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