10 Tips for Creating A Killer Customer Loyalty Program
•Download as PPTX, PDF•
2 likes•365 views
Learn about the best approaches to jump-start your small business' customer loyalty program, including how to make sure that your program fits your business' needs and how to get positive ROI from a digital customer loyalty program.
Recommended
Recommended
More Related Content
Recently uploaded
Recently uploaded (20)
Featured
Featured (20)
10 Tips for Creating A Killer Customer Loyalty Program
- 6. Becoming an entrepreneur has always been a lifelong dream. I’ve experienced much success throughout my journey, but my first repeat customer was the biggest milestone as a small business owner; that repeat business gave me the confidence and hope that my business would thrive. – Carol Todorovich, owner of Healthy Café Creations.
Editor's Notes
- Thanks you to the SBA and Score for their support of small business. We would like to talk to all you small business owners about ways to achieve big customer loyalty in a small business world, through customer loyalty programs
- Benefits of Driving Customer Loyalty – really the whyTrends in Customer Loyalty – What other small business owners are doing10 Tips for Creating Your Own Customer Loyalty Program – How to get your customer loyalty program kicked off
- Customer loyalty can bring big benefits to your small business. Existing customers not only comprise the majority of top line revenue, but can dramatically affect your business’ bottom line. It can cost up to ten times more to acquire a new customer than to retain an existing one. Existing customers that have an affinity with a brand, make it easier to up-sell and cross-sell them. There is a relationship – they already know and like what a brand does, so there is a measure of trust not afforded to an unknown company.
- New business development remains important, but acquiring new customers is more expensive and less lucrative than repeat business. According to the Loyalty Effect, a 5% increase in customer retention can lead to a 25% to100% increase in profit for your company. (Click)Further, a repeat customer spends sixty-seven percent (67%) more than a new one.
- Existing customers can also be leveraged to gain new customers, lowering the overall cost of customer acquisition. We see this today in digital word-of-mouth, such as customers posting reviews, checking in and posting stories and photos of their experience with businesses. A loyal existing customer can be a brand champion and important source of new revenue. Repeat customers are more likely to refer their friends and family to a business via word–of-mouth, online reviews, and social sites. Today, technology has amplified the reach of customers, making it easier to share recommendations about a particular business.
- One Manta small business owner, Carol Todorovich, said that owning her business was a lifelong dream fulfilled and that her first repeat customer was the biggest milestone for her as a business owner. Seeing that repeat customer gave her confidence and hope.
- A new trend is developing as far as customer loyalty is concerned – the focus is less on customer acquisition more on repeat customers61 percent of small business owners surveyed reported over half of their annual revenue comes from repeat customers
- SBOs are also spending less time and money on customer acquisitionOnly 14 percent spend the majority of their annual marketing budget to acquire new customersOnly 20 percent are investing most of their time and effort to acquire new customers.This is a significant shift in behavior - existing customers play a more influential role in business success than new customers.
- Because of this shift, customer loyalty programs are starting to gain traction in the small business community. Apps likeFivestars, belly, foursquare and rewardme are focused on digital customer loyalty programs that can help small businesses.
- Straight from Manta member, Richard Foote of Oregon Crepe Company, his company started using a digital punch card reward system powered by Square to reward repeat customers and build a loyal customer base. And he’s already seeing ROI on this system. This new focus from small businesses will help them to lead successful businesses.
- So, Where to Start? Manta recommends the following approach for small businesses looking to jump-start their Customer Loyalty Program
- Before leaping to the tactical applications of a loyalty program, you should start with the desired outcome in mind. Clearly define your goal and what you want to achieve from a customer loyalty program. This should be specific and measurable. Saying you want more business is too broad. But a goal of decreased customer churn, increased average order size, decreased costs or improved customer acquisition is more specific. Quantify the goal and add a timeline, such as “decrease customer churn by 20% in the next 18 months.”If the goal is to decrease churn, for example, the loyalty program may include an incentive to sign a longer-term agreement or contract for a monthly service. If the goal is improved customer acquisition, the program could incent existing customers to refer the business to their friends and family.
- Determine the AudienceThe next step is to determine who will be eligible for the program. Will it be everyone or just your best customers? For example, youmay want to target customers based on spending thresholds, purchases per year or even specific products. The upside to a more targeted group is that youwould be rewarding ideal buying behavior and subsequently driving more of it. This would also enable you to segment and reward your highest profit customers.
- Structure the Program ROI-Positive Once the primary goal and audience are selected, it’s important for you to determine the loyalty program structure. Setting this up at the onset better enables your business to delight customers, encourage them to buy more in the future and, ultimately drive a positive return on the investment. Will the program be points-based or have a tiered reward structure? Lay out multiple programs that could meet their goal, then determine how much they cost and how much they will net in return.
- Encourage Customers to Opt-InGiving customers multiple options for joining the loyalty program, whether from your website, via social media or from the point of purchase, is important in driving adoption. Track your opt-in list in an excel file or within a customer relationship management (CRM) system. There are many light-weight, low cost solutions like Zoho CRM, Base and Pipeline Deals that allow for easy upload of the opt-in list. These can also serve as platform for managing your business’ future communications, whether via email or in person.
- Automate, Automate, AutomateThere are many ways to automate a loyalty program. The more automated it is, the easier it will be to manage and maintain. Using automation does not mean that personalization is reduced. Business owners who participated in Manta’s study with BIA/Kelsey talked at length about the personal aspect of their loyalty programs and the importance of personalized service as a competitive advantage. Depending on the type of program a you select, there are many free or low-cost ways to get started.
- EmailStaying in touch via email is one of the easiest and most effective ways to kick-off a loyalty campaign. You can start simple by creating a steady stream of communication around your loyalty program. There are many free or low-cost email marketing solutions such as Constant Contact, Vertical Response and MailChimp that are easy to use and implement. These systems have pre-built templates or can be customized to more closely reflect your business’ unique brand.
- Go SocialSocial media can be an extremely effective way to engage existing customers on a regular basis. Start by first understanding where your customers are already engaged in social media (Facebook, Pinterest, Foursquare, others?) and launch your social engagement from there. Once you’ve selected the right network or networks, it’s important to build up your social community through varied, continuous content and engagement -– creating many options for sharing and referring.
- Get IntegratedAs youprogress with your loyalty program, consider more integrated and automated services like apps from Belly or FiveStars, which will allow you to automate email, mobile and social communications from within a single interface. These types of services also enable you to track customer activity such as total points, check-ins or redeemed rewards.
- Go MobileThere are a number of mobile apps, such as RewardMe, that your business can leverage to reward customers for positive habits. Apps like this use mobile phone numbers to track and distribute rewards. SpendGo, for example, rewards customers based on purchases and can be used at the point-of-sale. Another app is FrontFlip, which connects directly to Facebook and Twitter so that customers can share their favorite business’ promotions with their friends.
- Keep Them Engaged with Consistent CommunicationA business does not want to be “out of sight, out of mind” from existing customers. It’s important to remain visible with consistent and relevant communications. Target your communications to customers’ interests and preferences. This is one way that technology can help youto be more – rather than less – personal. For example, you couldsend an email to customers who bought a specific product with information about a complementary product. CRM, Email and Automation provide information about your customers that can be leveraged to create personalized communications.
- Small businesses have a tremendous opportunity to increase the value of the majority of their business - existing customers. Doing customer loyalty ineffectively can be as dangerous as not doing it at all.
- We would like to open up the floor for questions. Try to be as broad as possible, because we have many small business owners on from industries and all across the country.Apps we name: Fivestars, Belly, Foursquare and RewardMe, SpendGo, FrontFlipCRMs: Zoho CRM, Base and Pipeline DealsEmail Marketing: Constant Contact, Vertical Response and MailChimpSocial Networks: …