So far, 2020 has been a year of economic survival for small businesses. The COVID-19 pandemic has put seasoned business owners to the test and demanded a steep learning curve for new entrepreneurs. Rocked by endless iterations of safety regulations, operational shifts, store closures and staff layoffs, businesses today need to quickly adapt.
As small business owners navigate these critical junctures, customer loyalty can be the defining factor in their ability to weather the storm. Research has shown that improving customer loyalty by five percent can result in a 25 percent increase in profit. Here, we’ll provide a quick customer loyalty checklist you can follow to improve retention and ensure you’re getting the most out of your customer relationships.
Do you have a simple customer loyalty program in place?
One of the most effective ways to attract and retain customers is to implement a loyalty program. Through such programs, business owners reward customers for repeat visits and purchases by offering discounts, rebates and other incentives to keep them coming back.
To see the most ROI, avoid complicating factors like sign-up fees, personal data requirements and lengthy applications. A convenient approach like text-to-join can offset the inconvenience of point-of-sale enrollment. Customers may feel uncomfortable holding up the line behind them when signing up for a reward system at the register; text-to-join can easily be completed while the customer is waiting in line themselves, or after the transaction is complete. That independent sign-up option makes signing up more attractive and generates more registrations. Once customers sign-up, the idea of earning points that can be redeemed as rewards does the work for you, and entices them to return.
Are the rewards easy for your employees to explain to customers?
The roll-out process for any new loyalty program should be easy for employees to learn and for customers to understand. A successful customer loyalty system should have clearly-defined benefits with few rules and restrictions. Customers value immediate rewards over long-term gains. So note, frequent rewards without expiration dates or purchase limitations are most effective.
For employees, the program should require minimal training. A streamlined approach can save on instructional costs and management time, while empowering staff members to promote the loyalty program and its benefits. That ease-of-use also benefits the business owner, because it reduces management and training time and keeps the program easy to deploy. Especially for busy owners, a set-and-forget solution can make the initiation of the new loyalty program much less daunting to take on.
Do your customers double as brand influencers?
Take happy customer reviews a step further by turning your regulars into influencers. Do this by engaging with customers on social media to encourage the organic promotion of your business, while avoiding the expense of hiring professional influencer services.
Consider hosting a photo contest on Facebook or Instagram, where customers can share how they use your products or services in exchange for a special prize or discount. You can also post customer pictures directly to your official social media channels. Generating new content for your business to use, these types of posts also showcase your customer relationships and offer valuable exposure for the featured customer in return.
Are you prioritizing incremental sales?
New customer conversions that stem from your existing marketing strategies are often referred to as “incremental sales.” To boost retention, business owners should offer member benefits and exclusives that drive those conversions. For small businesses, that can be as simple as implementing a discounted gift card program or cash reward system that can be redeemed exclusively at your business.
By purchasing a discounted gift certificate for personal use, customers commit to a return visit. When those gift cards are sent to loved ones, the recipients become new customers and have the potential to become regulars.
Are you using an SMS text to connect with your customers?
Email campaigns are often overused, and can cause your marketing materials to get lost in a sea of spam messages in your customers’ inboxes. Research shows that SMS open rates are as high as 98 percent, whereas promotional emails are opened on average only 20 percent of the time.
Text-based or SMS rewards systems offer an alternative to email updates and ensure loyalty benefits are always accessible. But remember, avoid inundating your customers with text messages and instead share only the most valuable information and reward updates.
Are you offering rewards most coveted by customers?
A common mistake business owners make is trying to predict which discounts or rewards will be the most enticing for specific customers. Everyone is different, so it’s best to offer cash rewards that can be used exclusively at your business. That way, returning customers may select the product or item that best suits their needs at that time.
Cash incentives can also motivate customers to return and establish a highly sought-after benefit and can incentivise them to become regular participants in the loyalty program — and regular customers at your business.
Beyond improving revenue, customer retention also saves on marketing costs required to attract first-time customers and to establish a reputation in the community. For these reasons, customer loyalty programs are paramount for a company’s survival, growth and profitability. By leveraging and nurturing customer relationships, businesses can boost their visibility, keep regular customers feeling satisfied and find new ways to offer value. As a starting point, work through the above checklist and consider implementing a simplified, card-free loyalty program at your business to track and improve retention as you grow.
Ray Clopton is the President and CEO of Wilbur, a new app-free, card-free loyalty rewards program. As a leading payments industry and technology expert with more than 25 years of experience, Clopton launched STS, the parent company to Wilbur, in 1998 and it now serves more than 11,000 merchants with the tools to help grow their businesses. @RayClopton