What Is a Customer Loyalty Program and Why Is It Important for Small Businesses?

Customers love rewards programs because they give them special perks and discounts. But loyalty programs benefit not only the customers they serve but also the businesses that offer them.

As a small business owner, doing more with less is in your best interest. Loyalty programs do this by improving customer retention, offering valuable analytics into customer spending habits, and more.

What Is a Customer Loyalty Program and How Does It Keep Customers Obsessed With You?

This tried and true customer retention strategy rewards customers for their continued support of a brand or business. These programs are most successful when a regular touch of humanity is added by reaching out to customers via phone call, email, or text message to remind them of pending rewards or discounts.

Customer loyalty programs are only effective when customers are actually using them. The best way to make sure this happens is to gain a sincere understanding of your client base. By understanding who your customers are and what it is that they value, you will be able to offer them more than your competitors, which will keep them coming back time and time again.

How Rewards Programs Benefit Small Businesses

Rewards programs might seem counterintuitive initially when applied to the small business – you simply don’t have the resources to be giving anything away. An effective program can, however, garner you more income and return customers than you would have ever had without one.

Customer Data

Rewards programming can now be easily offered via a mobile application. Your customers love this because it makes their life easier, but you should also love this because of the invaluable information it mines for you.

Rewards program applications keep track of your customers’ spending habits from your store, which makes it easier for you to anticipate their next move and offer personalized shopping experiences.

Customers Market Your Business

When you offer a rewards program that adds value to your customer’s life, they will oftentimes be compelled to share your business with their friends and family so that they too can enjoy the benefits.

Another way to encourage happy customers to share their stories is by asking them to post about their experiences on social media or to leave your company a review on Google or Yelp in exchange for rewards.

A Sense of Community

Rewards programs can help customers feel like they’re part of something bigger than themselves. Being a part of a network of like-minded individuals can be incredibly inspiring and help foster meaningful moments and relationships.

Improved Customer Retention

When you offer unique experiences and discounts for birthdays, anniversaries, and other occasions, customers feel valued. This makes them more likely to do business with you than your competitors.

Customers are also more likely to refer friends and family if they know they will receive a specific perk or reward in exchange for each member who joins.

Saves You Money

Perhaps the most important reason for your small business to start a rewards program? You’ll save money in the long run.

It costs significantly less money to market to existing customers than to gain new ones. With the limited budget and resources of a small business, it is so important to offer rewards that keep your customers coming back time and time again.

Rewards Made Simple With Ostana

At Ostana, we understand there’s strength in numbers. Our mission is to unite the small business world together by gathering together a network of local businesses and giving them the loyalty tools they need to create a thriving loyalty program.