How can small businesses enhance their loyalty programs?
December 02, 2013

Gift card programs and loyalty programs present a variety of unique opportunities for small and medium-sized enterprises to increase customer retention and generate more revenue in the long run. However, current research suggests businesses have yet to tap into the full potential of these powerful tools.

According to a recent report from the multinational banking firm Barclays, customer loyalty has a direct impact on overall profitability. However, only 31 percent of more than 1,200 store owners claimed they place a priority on retaining clients or attracting new ones. Despite these findings, the process of encouraging repeat visits to shops is much less complicated than many people anticipate. In fact, the report found even the simplest gestures can leave a positive impression on both new and returning customers.

"This research shows just how important loyalty is and how something as simple as a smile and a friendly hello or remembering a customer's order can help the profitability of SMEs," the report stated.

How else can small and medium-sized businesses get the most out of their loyalty programs?

Get personal
In today's fast-paced world of digital marketing and automated software tools, customers have come to value personal interactions more than ever before. A recent report from the technology firm Fulcrum found stores can significantly boost their retention rates by simply remembering the birthdays of frequent visitors. The survey found 74 percent of consumers who received birthday messages from their favorite brands felt more strongly about those companies down the road. Those positive feelings translated to a boost in brand loyalty 88 percent of the time.

"While marketers who recognize their customers' birthdays assume the message creates an even stronger relationship with them, our consumer research confirms the positive influence on both the brand's image and future sales to that customer," Tara Piazza, senior vice president of Fulcrum, stated in a press release. "Firms deploying campaigns to celebrate their customers' birthdays tighten consumer relationships while also creating the opportunity to market additional products and services."

Create incentives
Loyalty programs must also keep customers engaged with a system that rewards a specific number of purchases. For example, the entrepreneurial support community Enterprise Nation creating a tiered system in which frequent visitors can earn special discounts for telling their friends and family about a company are often effective in creating a more loyal consumer base.

Nexus: G-WEBCD2