A customer loyalty program, sometimes known as a rewards program, gives your small business an easy way to reward your customers for doing what you want them to do: coming back and giving you repeat business. You already have a base of loyal customers, and creating a customer loyalty program helps you strengthen those relationships. For newer customers, or those who are still deciding how much they like you, a loyalty program can be just the right incentive to keep you front of mind and keep them coming back to your brick-and-mortar store.

Need convincing that customer loyalty is critical to your business? Try reading these posts on customer loyalty and the value of customer retention.

Elements of a Customer Loyalty Program

Implementing a customer loyalty program is a pretty simple matter. You need to make it easy for people to sign up, preferably in several ways: a short form to fill out when they’re shopping or checking out in the store, an easy form to fill out online via your Facebook page, blog, and/or website. (You can do it in conjunction with growing your e-mail list – we explain step by step how to do this here.) Once people sign up, you need to have a system for keeping track of those in your loyalty program; you want a single place with all the information on each customer who has opted in. That way, when you do special mailings or offers, you have your mailing list right there.

The third element of a successful customer loyalty program is the rewards that customers can “earn” by continuing to give you repeat business. Rewards programs can be simple, and are usually very low cost to the business, but they need to be measurable and tangible. Your customers need a tangible reason to opt in to the loyalty program, and you need a measurable way to see what you’re investing in the loyalty program and what kind of return you’re getting on it.

Types of Customer Loyalty Programs

Points system: this is what airlines and credit card companies use. In simplest terms, a point is awarded for every dollar spent, though the ratio may vary (1 point for every 1.50 dollars, for example). When a customer accrues a certain number of points, they can be redeemed for a product or service offered by the company or, often, by a partner company.

For small businesses: this system is simple in theory but can get a little complex to keep track of without an electronic system. Be sure you have an accurate way to track the points earned by your customers and to track when those points are used for rewards. You’ll also need to set up a rewards scale with specific prizes or options for certain amounts of points.

Discount system: many retail businesses use a discount system for loyalty programs. This works well for both retail shops and restaurants. For every purchase or for every dollar amount spent (could be $10 or $20 or whatever level you choose to set), the customer receives a credit. Once the customer has earned a certain number of credits, he gets a discount, perhaps a dollar amount or percent amount off on their next purchase.

For small businesses: this system is easy to implement and track. Generally, businesses use a punch card type system and customers simply show their card when it is full to receive their discount. Another bonus of this system is that the reward actually brings in even more business.

Freebie system: similar to the discount system, the freebie system is often used by cafes and coffee shops. When a customer makes a sufficient number of purchases or spends X amount of dollars, she gets a freebie. A coffee shop might offer one free coffee drink for every ten cups of coffee purchased, or a free pound of coffee for every ten pounds of coffee purchased.

For small businesses: this system is also easy to implement and track using a punch card set-up, and customers love the idea of getting something for free. It’s also easy for small businesses to track the amount of money they’ll invest for each customer, and it’s usually minimal. Retail shops can always offer freebies too, and it’s a good way to get rid of excess inventory.

Image by Easa Shamih.

Introducing my very old fashioned (using e-mail technology) “thank & recommend” strategy for building customer loyalty, customer visit frequency and improving retail or restaurant sales.

This system will help you lock in customers for life and earn business in the short term.

Before we get much further, please know that I get that life is busy and that there are lots of technical system (called trigger e-mail marketing) that do this in a more systematic way. But I want to encourage you that if things are at all sluggish in your business that you dedicate to working this system until things get better. Then, once they are better, set the calendar on autopilot naming days or weeks on a regular basis when you do it again for a short period to keep things flowing and extend your attitude of gratitude back to your customers (for example, once things are great again, pick the slowest night of the week for your restaurant or retail store – or choose to do this on the 2nd week of every month for five days, etc.). Customer loyalty, visit frequency and sales volume will improve.

Here’s the three step “thank and recommend” customer loyalty builder system:

1. Post lots of current products or menu items in an online photo album that is public. Post them on blog posts on your blog, Facebook photo albums, Flickr, or even Picasa.

2. Dedicate that every day for one week employees are required to take note (either using the technology tools of the point of sale system or old fashioned note-taking) of each customers e-mail address and what they bought.

3. At the end of each day, you, your employee or wait staff, should pen a short customized e-mail based on a standard system that will make it quick and easy… Here’s a template that you can follow to make the e-mails quick and easy to write.

Dear (insert first name of customer or Mr/Mrs/Ms Last name) -

I wanted to personally thank you for visiting us today at (insert name of business). Your support of our locally owned business really means a lot to us.

As I recall, you (choose purchased/enjoyed/ordered/took home) the (insert name of what they purchased).

Since you left, I’ve been thinking that you might also really like (insert name of three other potential products that are linked to their photo online). I included links to them here, but you can also check them out the next time you come in – which I hope is soon!

If you see something you’d like immediately, just hit reply, and I can answer any questions you might have or take care of your order over the phone tomorrow.

But don’t be a stranger – we always enjoy seeing you!

Thanks again for your business,

(insert your name)

P.S. In case you haven’t already, you can connect with us on Facebook at (insert direct link) and follow us on Twitter (insert direct link) for more ideas just like these. Thanks again!

Now – go get some sales and share your feedback in our comments below!

Photo Credit: a.drian

Andy and I were talking about customer service and customer retention yesterday, especially as it relates to local business types, and he said something that grabbed me.

“Businesses must quit treating customers like terrorists.”

Now that’s a strong statement, but let’s unpack it for your locally-owned small business.

Terrorists are folks with whom we should never negotiate. We have a policy of “no negotiation,” and we should stick with it – because the potential for recourse is too scary. Negotiating with terrorists could lead to chaos, anarchy or being overtaken by the manipulations of the enemy. Terrorists are enemies that harass and threaten our safety and security.

Do you look at your customers as enemies who harass you, threaten you or risk your safety and security? I hope not. But if you really squint, you might realize that deep down maybe you sometimes do view them this way.

Do you treat your small business customers with generosity, patience, respect? Or do you answer their questions briskly with distraction? Do you give them your full attention at every point of interaction – or are you bothered by their interruption? When you mess up – or they are confused about how to use or engage with your products or services the best way, are you wary of helping them fix their problem? Are you afraid that you will open a can of worms if you do the right thing? Does your safety and security feel threatened by the potential of fixing customer problems?

There are a million other scenarios that I could suggest along this realm, but let me stop with those, and instead point you to a better way.

Customers are NOT terrorists.

Let me challenge you to change your attitude and perspective towards your customers today. No matter how positively you feel towards your customers, there is always room to improve and kick it up another notch, so to speak. Here are some ways you can change your attitude toward your customers – and in turn, drastically improve your customer loyalty, customer retention – and yes, grow your business simply and aggressively.

1. View your customers and their problems as your primary marketing opportunity each and every day.
2. Remember that remarkable customer service experiences lead to many remarks by the customer to their many friends (often 100s of friends on social networks).
3. Consider the lifetime value of the customer in relation to fixing the small problem or time spent giving personal service, explanation or help today.
4. Remember that word of mouth marketing is the best marketing you can never buy (or if you make folks unhappy – the worst marketing you can never buy your way out of).
5. Remember that going through a trial with your customer will make them more loyal and mean more steady and secure income for you for a long time to come.

Try This Idea.

Dedicate a portion of your small business marketing budget and time to fix problems in a way that far exceeds “making it right” and that makes your customer exceedingly happy about you and your business.

What do you think? How can you grow your small business by taking advantage of problems today?

Editor’s Note: I fleshed out this idea and six others related to customer service and customer retention for the upcoming print issue of Greater Jackson Business magazine to hit newsstands in the next few days. Be sure to check it out.

Photo Credit: jm3

Andy and I are privileged in our work to conduct a lot of one-time consultations with small businesses who need a push in the right direction and an action list to help them take their small business marketing to the next level and create a more remarkable and consistent customer experience.

We also have the privilege to work very closely, literally in the trenches, to develop, implement and then teach a small number of business owners how to execute marketing strategies and tactics as well as customer experiences that will grow their businesses for the long term. In these relationships, we seek to be game changers – revolutionaries – who encourage “drastic and far-reaching changes in ways of thinking and behaving” when it comes to small business marketing and small business customer experiences. (If you’ve been hanging around here a while, you’ll recognize that quote as the dictionary definition of “revolution” and the reason behind the name of this blog.)

Looking for a customer experience revolution for your small business? Here are TEN posts from the deep archives of this blog that I thought were worth a second (or third) look when it comes to helping you create a profitable customer experience. These posts are FULL of great ideas and tips for small business customer service and experience improvements. Your customer experience, after all, is the most critical element to the short and long-term success of your business. It is the linchpin to your success. Click on the tip to read a full blog post on the topic (and don’t forget to leave behind your comments and ideas on each topic!).

1. Make sure your front-line sales team knows how to do their job – and the importance of it.

2. Make keeping customers (customer retention) and getting new customer referrals from your happy customers a primary focus.

3. Don’t assume anything about your customers. They probably do NOT know what to do with your stuff.

4. It really does pay to understand your customer. Customer feedback is critical (a bonus post for this tip!).

5. Use great photography in your small business marketing.

6. Use lighting as a cheap and easy way to improve your customer experience and to market your business 24 hours a day.

7. Pay attention to the auditory aspect of your customer experience. It matters.

8. Make shopping with you more convenient for the time-crunched shopper – which is all of us.

9. Don’t forget that marketing doesn’t stop when the customer walks in the door – it’s really just beginning.

10.   Last but not least, here are a few more great ideas for improving your customer experience. A revolutionary customer experience is possible for your small business!

Want more? If you’ve been trying to figure out how to achieve that in your business or are looking for a small business revolution, community or non-profit organization, please get in touch with us – we’d love to hear from you.

Photo Credit: advencap

For all businesses and organizations, regardless of size, the experience that the customer has with your business from start to finish – from the moment they meet you via marketing or word of mouth until the moment they cease to be your customer – must be flawlessly consistent.

When small businesses pull off this hat trick of “consistency” especially well, they reap generous rewards on the bottom line. Consistency in a desired customer experience that makes your customers feel like insiders is a sure meal ticket to success – the magic formula that all businesses are looking for – and few achieve. A desired customer experience is one that is remarkably different (for a true understanding of “remarkable” – read some Seth Godin books), convenient, and most of all creates a simple, easy-to-understand and experience…well, experience.

What does consistency look like in small business?

Merriam-Webster.com defines “consistency” as “a condition of adhering together” and as an “agreement or harmony of parts or features to one another or a whole.” But this is the part I really like… Merriam-Webster says “specifically: ability to be asserted together without contradiction.”

That’s really the bottom line. Examine your business today and look for anything that might contradict the specific and remarkable customer experience that you want for your customers to get from your small business. Marketing is only one piece of that puzzle, but it is critical that everything from your social media messages (including the tone and frequency of your posts) to your visual advertising to your visual merchandising and in-store way-finding to your employees’ dress, attitudes, personalities, expertise and ability to serve the customer… to the shopping bags, the after-the-sale service and follow-up to the on-going e-mail marketing, customer loyalty and retention efforts to yes, most of all, the experience that you put forward through your 24/7 presence on-line through your web site and blog – it all must be CONSISTENT. It must go together without contradiction.

Customer experience

Are your employees confusing your customers? Does your marketing message contradict your in-store experience? Is your in-store experience confusing – do all of your sensory experiences not play together to make a “harmony of parts or features to one another or a whole” in your small business?

Then, when you’ve created a system of customer experience that is consistent – you must replicate that system of customer experience every single day. It is this repetition that will grow your business.

Set your sacred cows aside today and look at your business in an effort to banish inconsistencies and create systems and experiences that grow a consistent customer for your business. A great customer experience is not an optional exercise.

What are you doing today to improve your consistent customer experience?

A few weeks ago, I wrote the following for my weekly E-mail letter (Want to get this letter? The content is current, relevant and behind the scenes business owner information. Sign up here):

Sometimes a project comes along that just warms the soul. Right now, Andy and I are working with the new owner of a historic soda fountain as he seeks to share the nostalgia and heritage of this landmark with a new generation – using New Media and Social Media tools. Recently, when meeting with the new owner, I found myself saying something that I say a lot: “Customers are more loyal when they feel like an insider, and prospects are more likely to convert when they have ‘insider’ information.”

Similarly, several times a week, without fail, folks ask us about our lives… Usually the question goes something like this: “It seems like you are on the road ALL THE TIME… HOW do you do it?” Or, “How do you have time to do all of this?”

Really, the bottom line is that folks want insider information – they want a peak behind the scenes. And your customers want the same from you. As strange as it may seem, in this age of reality shows and YouTube (check out our channel), people really do care what happens behind the scenes at your business. I don’t think I’m that interesting, but who am I to tell you how to feel or what to be interested in? Or maybe, if you’re like me, it’s so refreshing to know that other people think or feel like I do. I believe “Insider Information” is a “needle-mover” when it comes to customer loyalty, word of mouth marketing and long-term success.

What are YOU doing to make your customers and prospects feel like “Insiders?” (Yep, go ahead, hit the “reply” button and tell us. Seriously.)

Maybe “Insider Information” from us will help you become more motivated and/or equipped to use the tools of Social Media or New Media effectively for your business. So, from this point forward, our e-mail newsletter will be flavored with the spice of our life: tales of life on the road, digital nomad-ism, social media, new media, late-night brainstorming sessions, work/life balancing acts and our disdain for early starts. Welcome to the INSIDE, loyal readers.

In follow-up to this e-mail, I got a note from friend Mandy Becker, owner of Swagger Gifts in Cary, NC. I asked her permission to share her comments with you because I thought her feedback was so apt – it reinforces the message. Here’s what Mandy had to say:

I loved this!  I totally think the insider info think is critical!  The last three times I went to market, I wrote a blog about what it was like, what I was buying, etc. My customers loved it! They felt like they were part of the action! I have heard so many times, “Oh, I wish I owned a gift shop – what’s it really like? Do you love it?  What’s a typical day.” It is amazing how much people care about one another’s lives; I think we live vicariously through others in some way. Anyway – thank you!

P.S. I think I might even do a weekly blog post called “Insider Information.” Thanks for the idea – I hope it is okay if I use it?

Where are the points in your customer experience that make a new customer feel awkward, out of the loop? Do some customers walk into your restaurant and know exactly what to do, what to expect, how to respond? Learn from your regulars – and find ways to make new customers feel equally comfortable. Sales and tips will increase accordingly.