When you think of a loyalty program, the first thoughts that pop into your mind are of people getting punches until they receive a free latte. Or, they fly so much and earn airline miles. However, loyalty can extend to practitioners and small business owners in various niches as well. Before you incorporate this plan, it’s important to understand how a loyalty program works and if it could benefit your company or practice.
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General Information
A loyalty program rewards customers for using their services again or purchasing their products again. For some businesses, it’s best to set the number of times a person purchases a bit higher if it’s a product or service they could use regularly. For others, encouraging the customer to come back once again when they need your service or product, no matter how long in the future, is more practical.
Some ideas of how to keep track of customer loyalty include having punch cards, encouraging them to keep receipts, having a membership card, or using an app. Besides keeping track of the number of times someone utilized your business, you could also provide coupons to receive your product or service at a discounted rate when they return. Or, if you’re trying to increase interest in a particular product or service, you could offer them a special deal with that product or service, such as getting to try it at half off or free.
The rewards could include getting half off the next item, giving away free items or services, or offering upgrades.
Why Loyalty Programs Work
People like to receive free things and discounts. They enjoy feeling as though they got more for their money or are being rewarded in some way, shape, or form for supporting a business or practice.
You’re also showing your appreciation to your customers, patients, or clients for continuing to use your products or services. This helps you build a connection with the people who utilize your products or services, even if you can’t personally thank each one who walks out your door after using your business.
Some people are out looking for a deal any chance they can get. If you’re offering competitively priced products or services and offer high quality, you’re one step ahead of the competition. However, that isn’t always enough to be in the top spot. A customer loyalty program could be what sets you apart from the rest and have people returning to you as opposed to your competitors. Think about it logically: which one is a person going to use? The company that’s giving them rewards or the company that’s not showing its gratitude?
Could You Lose Money on This?
While it’s possible you could have people that are getting as much from your company for free as possible, this isn’t the norm. Most people are going to utilize your products or services as they need or desire, no more. As a result, loyalty programs don’t tend to cost a company a great deal in revenue.
On the other hand, they can boost your sales when you consider the number of people returning because they’ll get something for shopping with you again. It’s also an opportunity to expose them to your other products or services, which could further enhance business.
If you want to ensure you won’t lose out on adding a customer loyalty program, make sure what you’re giving away isn’t the most popular item or service you offer, or choose to only offer the product or service at a discounted rate so you’re not losing out on the deal. You could also set a strict number of times a person must use your products or services before receiving any rewards.
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