A Loyalty Program is a way of encouraging customers to use your product or service over and over again and as a way of rewarding them for their positive behaviour. (I actually do sound like a dog trainer)
The most obvious loyalty programs are found at coffee shops, pet food stores and grocery stores, but Air Miles, Frequent Flier programs and credit card points are all derivatives. Some examples of loyalty programs:
1) A card that is stamped or punched and the customer receives a free widget after they have purchased a certain number of widgets.
2) Track purchases of clients in your computer and when they reach a certain level they get a discount off their next purchase.
3) After spending a certain amount clients can be invited to a special after hours sale with refreshments.
4) When someone refers a new client they receive a reward.
A loyalty program should be carefully designed to ensure the reward is commensurate with the loyalty. If a customer spends $ 500.00 and gets a $ 10.00 off coupon it will not instill a great deal of loyalty or motivate the customer to do business with you.
Write out the specifics of the program and if there is any confusion refer to the written rule so there are no misunderstandings.
In my opinion loyalty programs that require the customer to carry a card are not as effective as one where they just supply a phone number and a computer tracks their purchases. How many loyalty cards can a person keep track of?
One last comment on loyalty cards is an idea that I have seen work successfully with in-store debit cards – the ones like Starbucks use where you “load” it with money. Offer a special draw for everyone that purchases a $ 25.00 card; like tickets to a major concert. Not only do they feel “loyal” to use up the $ 25.00, but they will bring a friend too. A different take on building loyalty.