Today, 34% of small businesses offer a customer loyalty and rewards program to increase visits. What do they know that other businesses don’t? It can cost up to ten times more to acquire a new customer than to keep an existing one. A returning customer will also spend 67% more on purchases than a first-time customer. It pays to win back your existing customers using a loyalty rewards program.
Fortunately, there are plenty of easy-to-use loyalty programs available. These allow you to earn repeat business with much less work. However, choosing one of the hundreds of systems available can be overwhelming. To help you in your decision, consider the following aspects that make up a successful customer loyalty program:
1. Does the loyalty program make it as easy as possible to add new members?
When investing in or using a loyalty program, you want to make sure, most importantly, that your loyalty program is easy to add new members to.
A loyalty program can only bring back and reward members who belong to it. Having as many members as possible will increase your success rate. When looking for a loyalty program, make sure that the customer registration process is easy.
2. Does the registration process require a lot of information?
For a registration process to be easy, it should initially only require one to two pieces of information, such as a name and phone number, max. It may be tempting to collect as much information as possible, however, it also creates pressure and a time burden on the customer, or yourself. Look for a system that collects a minimal amount of information from the customer at the beginning, and allows you to gather and add more information in time.
3. Are you collecting the right information?
When someone signs up for your loyalty program, the easiest information to collect, other than a name, is usually a phone number or email address. What is the right information to collect at the point of sign up? At Loyalty Points, we lean toward using a phone number for the following reasons:
- A phone number is easier to download an application. However, the two together can be even more powerful.
- A phone number is easier for you or your new member to search or type and/or redeem rewards. It also avoids spelling errors (as opposed to a long email address).
- Participants may have multiple email addresses, including addresses they never check (and are likely to give you). Most people only have one phone number, usually a cell phone that they see often. If your loyalty program provides SMS(text message) marketing capabilities, this increases the likelihood that your messages will be seen more often, especially considering that 98% of text messages are read. It can be difficult to compete with other emails in an inbox if it is your only form of communication.
- Customers remember your phone numbers quickly and easily.
If you have a name, phone number and email address, it’s even better. Try to collect at least two of the three initially.
4. Is the physical act of enrolling in a loyalty program the best option for your business or customers?
There are a variety of ways for members to physically enroll in a loyalty program, such as downloading a mobile app, typing an email address or phone number on a touch-screen tablet, filling out a paper form, or verbally giving information to the cashier. Which is the most effective? Again, it depends on ease of use for you and your potential members.
Below, we look at five enrollment options offered by most loyalty programs. As we discussed earlier, being able to add as many members to your loyalty program as possible will increase your chances of seeing more repeat business. To ensure this, you need to give customers at least 2-3 different, and easy to sign up options. We will look at the pros and cons of each option:
Option 1: customer signs up on a cell phone using a mobile app.
A loyalty program that relies solely on the mobile app (only) is attractive because it is cost effective and customers handle everything on their own mobile device.
If a customer is paying and they are willing to sign up for your loyalty program, the mobile app registration process goes like this: The customer must pull out a smartphone, search for your app on Google Play or The App Store, wait for the app to download (1-3 minutes), open the app, fill in the email and password to create a rewards account. That’s a lot to ask of someone who is ready to go and it’s enough for someone to say “No thanks, maybe another day.”
You should also keep in mind that every customer who downloads a mobile app, approximately 30% of those customers will only open that app once a month. While it may seem like everyone and their dog has a smartphone, only 64% Of adults own one. This means that a significant number of people won’t be able to join your rewards program if the only way to sign up is through a mobile app.
Loyalty mobile apps have a lot of versatility when it comes to marketing functions, but it’s not simple for the customer to use them. If you are leaning toward a rewards program that has a mobile app, make sure there are additional ways for customers to join.
Option 2: customer signs in on a touchscreen tablet or device while checking out.
The obvious pro of this option is that any customer who checks out at your cash register will be able to sign up to your rewards program.
If your loyalty program offers this type of user registration, make sure the touch screen user interface (the words, images and/or buttons on the screen) is simple and does not distract from the main point of the device: Customer to fill out one or two fields just to sign up for your loyalty program.
Something to keep in mind: even though customers may sign up, don’t rely solely on the device to convince customers to join your loyalty program. Getting your employees to ask every customer to join your rewards program is crucial to a continuous and consistent number of customer subscriptions. Based on our own field testing, we found that asking “What is your phone number?” AND “Do you have rewards to redeem?”, Increases the number of signs as it “assumes closure” (it’s a sales tactic) Enough to ask the employee what rewards they can receive.
Option 3: Customer signs in on a touchscreen device facing the point of sale.
As mentioned above, a customer in front of the touchscreen tablet is ideal. However, some programs install the device elsewhere within the store, away from the cash register. This makes it much more difficult to sign people in.
Imagine this nightmare: You are paying a lot of money for groceries and realize you could earn points and get discounts on that purchase by signing up for the supermarket’s rewards card. You ask to sign up and the clerk tells you that you have to drop your items at the register, walk 6 feet away to the designated rewards sign up iPad, and fill out your information there to join. You hesitantly walk away from your items to the iPad where it requires your full name, email, phone number, and shipping address, and then asks you to answer a few other questions. Once you’re done, you return to the cash register, wait for the cashier to finish checking out the customer who took your place in line, then you can finally walk away and get your points and discounts. The whole process takes about 4-7 minutes, which is a lifetime if you have already walked multiple laps around the store.
Asking a customer to leave your transaction to sign up on a separate device, even if it’s only a couple of feet away, is time consuming and most customers will refuse to join.
Option 4: Employee signs customers in at your point of sale or an employee facing the device.
As a small business owner, you are constantly busy. Long lines form easily and staff can get stressed. When this happens, asking staff to sign new members may not go well. However, having your staff involved in the sign-up process can dramatically increase the number of members you acquire. Why? It’s easier for an enthusiastic employee to convince a customer to sign up for your rewards program than a marketing display or shiny device. If your loyalty program can integrate with your point of sale (either fully integrated with your POS software or running alongside it as a standalone application) it will fit more naturally into the employee transaction process.
This option can get a massive amount of customers to sign up without the help of other registration options, but it requires more effort. To make this option work for your business, you need to heavily train your staff. The easiest way to ensure that every employee signs up new members is to ask every customer, every time. That’s how Panera Bread’s staff signed up more than 14 million customers.
Option 5: the customer signs up online
It’s a nice thought, but unfortunately people don’t tend to remember to go home and sign up for your rewards program after the fact.
Do your research and find a provider with a combination of options 1, 2 and 4.
At the end of the day, don’t insist if the loyalty and rewards program you can afford to implement doesn’t have all the options available for customers to sign up for. As long as customers are able to sign up quickly and easily with a solid mode of contact such as an email or phone number, and your employees help promote sign-ups, you’ll be on the right track.
Fortune 500 companies spend millions of dollars building their own personalized rewards marketing systems and even they can’t cover every base. Starbucks and Pinkberry ask for customer phone numbers but still don’t have text messages or personalized messages for customers who haven’t visited in long periods of time!
Finally, to make sure your rewards and loyalty marketing program knocks it out of the park, offer great rewards that incentivize customers to spend more and visit faster, and communicate promotions, announcements and rewards updates regularly with customers in your newly created database. This will delight your frequent visitors and increase your business revenue.