February 18, 2019

How to build a customer loyalty program: 3 creative ways

Why does your small business need to increase customer loyalty? Let’s start out with some encouraging statistics: it costs five to ten times less to keep existing customers than to get new ones. Repeat customers spend 67% more. And increasing customer retention rates by just 5% has been shown to increase profits by up to 95%.

Want to improve customer loyalty? The first step is to get the right customer relationship management software. Get a free demo of Womply CRM, the only CRM that comes pre-populated with your customer data.

Now for the scary news: up to 4 of 5 satisfied customers never come back. (Think about that for a minute.) And just because you have a loyalty program, that doesn’t automatically mean it will be effective.

The average U.S. household is enrolled in 29 loyalty programs… but only uses 12. That means nearly 60% of loyalty programs are completely useless. What’s worse, the Amazons and Walmarts of the world are spending billions of dollars a year (that’s billions with a b) trying to win the loyalty of your local customers.

How can you compete with that? By thinking outside the box and maximizing your advantages as a local business—yes, you have advantages. Here are three creative ways you can increase customer loyalty.

Get more involved in your community and capitalize on the “go local” movement

Small, local businesses are gaining traction, and not just with hipsters looking for hand-crafted Swedish hatchets or single-source cruelty-free organic coffee. The biggest advantages local businesses have over the megacorporations are that you can provide the customer service, unique ambiance, positive purchasing experience, and personal touch that big business can’t hope to match.

Double down on your unique business differentiators and get active in the “go local” movement.

Get involved in your community. Host local events. (63% of customers say they want invitations to more local events, but only 12% get them.) Volunteer for or sponsor the local football, soccer, la crosse, or diving team—whatever locals are proud of and support. Build a memorable float for the local parade. Get creative!

The main point is your business should be inextricably associated with your town, and local residents should feel a personal connection with you and your business. Small efforts in this area can have lasting impact.

However, no matter how much you improve your in-person interaction with your customers, you must not overlook the importance of a robust online presence.

Optimize your online presence to attract more loyal customers

This may sound obvious, but in order to earn more loyal customers, you need to actually get more customers. The more customers you “wow” with your unique, personal service, the more you can turn into regulars. And today, attracting more customers begins with owning your online presence.

This concept may sound counterintuitive for a small, local business that primarily relies on “word of mouth,” but the fact is, while people still rely on word of mouth to find local businesses today, that conversation has moved online. 84% percent of consumers search online for local businesses, 97% of customers read online reviews for local businesses, and 88% of consumers trust those reviews as much as personal recommendations from friends and family.

As we’ve written before, you absolutely must start with claiming your business profile on all of the popular review sites like Yelp, Facebook, Google, and TripAdvisor, which is step one to improving your online presence and building a healthy population of loyal customers.

These review sites give you the opportunity to boost loyalty by building a visible relationship with your customers. This may be a somewhat unconventional way of thinking about a loyalty program but it is absolutely part of the process of getting and keeping loyal customers. Here’s one case study where a local Florida restaurant used online reviews to create loyalty and drive new business.

Use CRM software to build or enrich your email customer loyalty program

Any loyalty program is worthless if you don’t know who your customers are and don’t have their contact information. This is an almost universal problem for small businesses—even if they purchase dedicated loyalty program software, they don’t have the contact information to make it effective. And remember, U.S. households use only about 60% of the loyalty programs they belong to. Build the relationship first, or your customer loyalty program will just be more white noise.

Rather than pay for specialized loyalty program software, which is often a one-trick pony, we recommend using customer relationship management software to identify those customers who are already loyal, those who are semi-regulars, and those who have the potential to become regulars, and building on that.

How does CRM help identify these customer groups and facilitate loyalty efforts? Well, if you don’t already have a robust customer list including names and email/contact information, not much. However, Womply has solved the fundamental “no-data” problem for small businesses by creating the only pre-populated CRM in the world.

When a customer transacts with the business, Womply CRM automatically creates or updates a complete customer profile including name, email address, and more, drawing on a proprietary database of 200 million consumer profiles and more than $1 trillion in transaction data.

The benefits to the business are twofold: a comprehensive customer list that gets better every day, and a frictionless way to encourage repeat visits from those customers through automated email marketing—even if they don’t have a way to collect customer email addresses.

Marketing automation software improves customer loyalty while saving you time

Once you have identified your customers, the best way to build loyalty is with targeted email marketing campaigns. As we’ve written before, email marketing is far and away the most powerful, effective, and efficient marketing tool for small businesses.

Did you know that 86% of customers actually want promotional emails from businesses they patronize? Don’t leave money on the table. Womply CRM allows you to easily send offers, special promotions, follow-up emails, birthday emails, reminders, follow-up emails based on recent purchases, and more.

The old way of doing a “loyalty program” was to use punch cards or other clunky, manual ways to keep track of visits. In some cases these things may still have their place, but the true goal here is to drive repeat business. For that purpose, an effective CRM built for small business and email marketing have to come first.

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