15 Jul
Loyalty card, schmoyalty card. What is loyalty? It seems there is a lot of confusion going around about what exactly loyalty means. Many people seem to think of it as huge discounts, scandalous offers and unbeatable deals. But that isn’t loyalty – it’s the opposite. It’s shopping around, without being loyal to anyone, basing the decision purely on price. Big brands can afford to compete on price, but for many independent shops this simply isn’t a viable way of doing business. Sure, you might get some customers in, but because they were attracted by an incredible offer chances are they won’t return unless they are offered something equally business-destroyingly great. Killing your business, and others, too.
Statistics show that only 8% of customers who come through a deal end up becoming regulars. That’s why loyalty should be your focus when it comes to attracting new business, not big discounts. They don’t work in the long run.
Loyalty, by definition, is the quality of being loyal. Supporting someone or something. And that is exactly what small independent businesses need. They need regular customers to keep business rolling. In every sector there are good times and bad times, quieter and busier periods. Loyal customers tend not to deviate as much. They are simply less sensitive to external factors, and therefore valuable to you.
How and why focusing on loyalty can increase revenue
By growing your loyal customer base, you can do a lot for your business. Stop chasing the bargain-hunters who are only there because of an extortionate good deal. Chances are they wouldn’t have visited otherwise. Those who walk in, stumble across it or go based on a friend’s recommendation, are more valuable, and are the ones to focus your energy on when it comes to encouraging their loyalty towards you. How to do it? Well let us share with you a secret…
Everyone loves free stuff. Everyone loves a bargain. That’s why people go crazy in the sales, thinking they save a load of money by spending money they might not otherwise have spent. This is the characteristic of human mindset you need to exploit.
Offer your customers something for free when they visit your shop. Now, not outright ‘here’s a free drink!’ – but ‘here’s a free drink next time, if you return. The classic stamp cards or points scheme fuel the primal want for free stuff, and customers? They love it, and they will come back to get their reward. More repeat business=higher revenue.
Why it works
A loyalty stamp card that gives its owner every 7th coffee free is extremely powerful. First of all it a saving, which is universally appealing regardless of its size. Secondly, it tells the customer that you value them enough to give them something for free for staying with you. And that’s flattering.
It might also be just the thing that keeps them from going elsewhere. If your quality of service and product exceeds other places, perfect. But there might be somewhere slightly more convenient – these are the ones to beat. With a loyalty program, you have an extra edge. You’re effectively telling the customer – we appreciate you and therefore we will reward you.
I often find myself returning to the same coffee shop simply because I get every 6th hot drink for free. This is only a fractional saving, but I still do it. The coffee isn’t the out-of-this-world good, but I know it and the staff are friendly, encouraging me to get my points.
Tick your customers’ boxes
For many customers, there are a few bases to cover in order to be their first choice. Convenience, price, quality and friendliness of staff. A loyalty program ticks two of these – it makes the staff appear friendly, and it has a minor positive effect on the price. I am a fan of loyalty apps these days – as it removes the chance of leaving it at home. I always have my phone on me, and love the flexibility these apps give compared to the traditional paper cards.
How your customers will repay you
We say GO loyalty! Push loyalty to your customers. Make your existing customers happy by offering them something in return. Those happy customers will tell their friends, who’ll come in, join your loyalty program, and tell their friends. It’s a simple and easy way of boosting word of mouth-marketing, without spending money on ads, flyers or anything else. We’ve all been there – told our friends or family how great that new place around the corner is. So keep your customers happy, and they’ll do your marketing for you.
It will save you money and time, and you’ll still grow your business because you focus your efforts on the customers you have – those you know will buy – instead of trying to convince someone who probably won’t.
