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Is It Time to Start a Loyalty Program for Your Business?

Amie Parnaby
07/04/2021
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Loyalty Program

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We’ve talked a lot recently about growing a loyal customer base and how to go about it. Garnering customer loyalty does fantastic things for your business’s bottom line, from client retention, advocacy (personal recommendations), and increasing average spending. A loyalty program is one of the few ways you can make returning clients look and act as loyal, die-hard fans of your business.

What is a loyalty program?

Loyalty programs have been around for a very long time, and you’ve probably got a stamp card from a store or a salon at some point in your life. If you always go to the same supermarket, you probably have a points-based loyalty card – I know I do. However, greater digitisation across all business means that the old stamp card is not an option. Moreover, did that ever really work effectively? People lost their cards, they got multiple cards that you had to tally up to make a full one, or they just forgot about it. It sat in a pile of receipts and got thrown out at the end of the week or month.

Now a loyalty program needs to be so much more than a stamp card or points tally – it needs to give tangible benefit to the client. Otherwise, they won’t see any real reason to remain loyal or at least to return regularly.

According to Charlie Casey, Co-founder and CEO of LoyaltyLion

“[A loyalty program] is a way to show your customers that you value their loyalty, whilst also helping differentiate your business from competitors.”

There’s no better way to engender your clients’ loyalty than by proving that you value their business with you. Everyone feels better when they feel valued; it’s human nature. When clients start feeling taken for granted, that’s when they are most likely to find someone else who does value them. It’s the same way in any relationship.

What can a loyalty program do for your business?

Loyalty programs do several things for the betterment of your business. 

  • Show your clients how much you value their business
  • Give clients a reason to come back
  • Get clients to spend more money
  • Differentiate you from your competitors
  • Provide invaluable client data – whether it’s anonymised or not

Valued clients

Valued clients feel more incentivised to continue doing business with you when you show them how much you appreciate them. Providing excellent service and products is just one way of doing that. When you consistently go beyond the minimum expected benefit, you make people feel valued; it’s a continuing cycle that breeds loyalty.

Incentive to return

Even with the first batch of points from an initial appointment or purchase from your store, it makes them think about returning. To really kickstart their interest, you can add an arbitrary number of unearned points to their loyalty account to make them feel like they got a good deal. When they can see the number of points, stamps, or credits they have and how they can benefit from continued visits to your business, it makes them think about coming back.

Increased spending

Did you know that some business intelligence analytics find that people redeeming a voucher or discount from their loyalty scheme spend more? On average, people redeeming points or equivalent cash or discount vouchers spend 39% more. Sure, they’re taking advantage of the loyalty reward, but it’s yet another incentive to keep coming back. Moreover, they invariably spend more, increasing your revenue.

Data collection

Invaluable client purchasing data can come from your loyalty scheme analytics. You can track your loyalty metrics with the number of people who come back, those who redeem their rewards, and those who spend more. You can even combine that data with your sales info to track the most popular services against your most loyal and highest-spending clients.

Marketing engagement

Using a loyalty program as a marketing tool is a far better way of engaging clients in your email marketing. When clients receive an email from their loyalty program, they are more likely to engage because it is personal. Their loyalty points and offers are tailored specifically to their spending patterns and the deals they can access. 

Why do you need a loyalty program?

Did you know that the existence of your loyalty program can mean the difference between a client choosing your business over your competitor’s?

When people look for a new service provider or retail establishment, they aren’t looking for a one time deal. It’s far too time-consuming to search for a new anything every time you want a haircut or do your weekly shopping. Clients and customers are searching for something that will work for them in the long term.

Follow that through, and you have people crying out for a service provider who will look after them through the lifecycle of their business. When you promote your loyalty scheme, you show people the benefits of doing business with you.

Having a loyalty scheme is no guarantee that people will stay loyal to you, but it incentivises people to return. In continuation, the more the clients return, collect more points or stamps, and receive the benefits of their continued custom, the more they will come to know your products, your services and grow to love them.

Different Methods of Rewarding Loyalty

Your loyalty program doesn’t always need to be a monetised scheme. While cash and discount vouchers are great incentives for bringing clients back, it’s not the only tangible benefit you can offer with a loyalty scheme.

You’ve probably seen some of these before:

  • Points-based – the client “earns” points based on their spending. The number of points earned per £/$/€ is up to you. The reward can be a predetermined number of points = £X gift voucher or 10% discount card.
  • Visit or appointment-based – It’s the usual buy “X” and get one free. This is often employed by coffee shops, salons, personal trainers, and many other business types.
  • Tier-based – Not often used as a standalone loyalty program, it uses the points system to build clients up to predetermined tiers at which they can access exclusive offers and deals.
  • Event/Referral-Based – Want to reward your clients for their advocacy? This is the way to go. Sometimes, giving away a discount or gift voucher for the number of active referrals you could get in return is worth far more than you would get from a targeted ad campaign.

Sure, deals, discounts, and cash equivalent incentives are great rewards for a client, and they do tend to lead to increased spending. However, it doesn’t always have to cost you revenue.

How about offering certain “tiers” early access to new collections or products. Maybe you can issue invitations to product launches or new service demonstrations. There are so many ways you can use your loyalty program to bring your clients back time and again.

Particularly in the service industries, loyal clients begin to feel like friends, and treating friends feels good.

Linking a loyalty system with SimplyBook.me

While a loyalty program feature is on our list of features to implement, we aren’t there yet. However, don’t let that put you off starting a loyalty scheme for your clients. Several loyalty systems are available, and many have Zapier integration that works with the SimplyBook.me scheduling system.

Consequently, you can make your loyalty scheme digital, potentially linking it to a phone number or an email address without any risk of losing a physical card.

Some Examples of loyalty schemes you can use with Zapier:

  • Loopy Loyalty – one of the cheapest this is a simple digital stamp card; it’s also payable monthly without any tie-in if you decide it isn’t for you.
  • LoyalZoo – not yet available but “upcoming” on Zapier; this is a point-based loyalty program.
  • Loyalty Gator – A much more comprehensive package includes points, “Buy X get one Free”, and a two-tier system. It’s slightly more expensive, but for a growing business, it could easily be worth the investment. It is available through Zapier, but also has integration via API.

I mentioned LoyaltyLion above; however, that loyalty program is not available via Zapier. Alternatively, if you have the skills, they do have integration via API. They have a super-comprehensive product that provides everything you could need for a loyalty scheme. However, I wouldn’t recommend it for a small business or your first foray into a loyalty program because the cost does lend itself more to large businesses with a high average purchase.

Takeaway: A loyalty scheme is a great idea! 

Were you expecting more? A loyalty program is an excellent idea if you want to:

  • Attract new clients
  • Retain existing clients 
  • Convert clients to brand ambassadors
  • Increase average spend per visit
  • Learn more about upcoming trends
  • Learn more about your clients’ spending patterns
  • Engage your clients in your offers and promotions

Of course, if you don’t want to do any of those things, maybe a client loyalty program isn’t for you. However, I suspect most people would like to do at least some of the items on that list. 

Think about it. If you have a relationship with a company or brand, whether it’s retail or service-based, you get something out of the ordinary from them that keeps your loyalty. If that “something extra” were to disappear tomorrow, you would probably look elsewhere for another business. 

Your clients are no different! A loyalty program allows you to formalise and automate for expediency, that little bit extra that will make you stand out from your competitors. You can’t afford to always compete in a race to the bottom on price in a saturated market. It’s the little extras and benefits you bring to your clients that will keep you competitive.

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