Use It. Share It. Grow It
You don't need to be BIG to have a loyalty program!
Loyalty programs do not always need to look similar to those of large retailers, banks, hotels and airlines.
They do not have to be what big companies think they should be. If you own a chain of pizzerias or have a
dog walking service, there are fundamental steps you can take as a business owner or business executive to
develop a customer loyalty platform to fit your needs.
You know your business better than anyone. Take the time to talk to your customers to see what perks or
rewards they find attractive. Find out what you can do to earn their repeat business. Find out what you
can do to increase their spending. Find out what you can do to earn their business more frequently. Once
you understand what motivates their behavior, you will realize how to manifest that knowledge into building
a program that works for you and your customers.
There are five basic steps to undertake when building a loyalty program. They include:
1. Identify Customers
2. Track Spending
3. Motivate Behavior
4. Reward Performance
5. Measure Results
Start with identifying your customers. If you don't have a means to identify your customers, you will not
be able to track what they’re buying.. You must be able to tie some type of unique identifier (loyalty card,
payment instrument, e-mail address, etc.) to the customer. Research what type of identifier will work best for
your business in a cost effective and efficient way.
Now you can track. Once the customer identifier is in place, you now have a means to track purchasing activity.
There are numerous systems available on the market to perform this function. Talk to your point-of-sale provider,
credit card processor, IT department or contact my office on the best options for your business to initiate a
tracking system for your program.
Motivate, motivate, motivate. This is the fun part. Once you are able to identify and track spending, you can
then start to market to your customers to motivate their purchasing behavior. You'll be surprised what a little
insight into the customer’s historical purchases can do to motivate their behavior.
Reward customer performance. Everyone likes to be rewarded, and therefore every business owner should apply the
most basic principles of nature into their business practice. If your dog sits, he will get a treat. If your
child listens in class, she will get a star. If your customers are motivated, they will take action. If the
reward for your dog was anything less than a treat, chances are you would not be able to train him to sit. The
same basic fundamentals apply with your loyalty program. If the reward is perceived substantial enough, your
customer will take action. Offer a reward of ten cents of per gallon if the customer reaches a certain spend
threshold – you’ll then see a motivated customer!
You can't manage what you can't measure. This statement is as true as it gets with managing a loyalty program.
All of the previous steps are irrelevant if you can’t measure the results. Loyalty programs evolve on the success
of promotions and campaigns. Once you can measure the results of each promotion, the program will become fun to manage.
A well thought out loyalty strategy will pay dividends to your business over time. Once you put the tools in place
to initiate each of the five steps, your loyalty program will have the basic foundation needed to operate a program
which you can benefit from and nurture over time. Each step will take time to build, but all are needed to truly
measure the success of your loyalty initiative.