10 Tips to Launch a Loyalty Program on a Budget


Small businesses do not always have the necessary funds to dedicate to building a bespoke loyalty and rewards program. This often leaves them out of the loop when it comes to trying to compete with larger brands. However, customer satisfaction and retention are typically a top priority goal for SMEs. So, in this guide, we break down what businesses can, and should, do to create fantastic loyalty programs that benefit the company and their customers.
1. Set Out Clear Objectives
What do you want to achieve by launching your own loyalty program? Before you begin assembling your plan, you need to be sure of what your goals are and why you have decided this is a good new addition to your business. It could be that you want to better know and understand your customers, collect data to build an ideal client profile, or to regain and retain customers’ attention. Be sure about how you want your loyalty program to work for you; this point will inform how you establish your systems and interface for the program, so it is paramount you are clear about your desired result.
2. Identify Your Target Market
Who do you want to use your loyalty program? You probably have a decent idea about what market segments you usually attract or target already. This information is key to how you build your loyalty strategy. For example, if your main clientele are of an older generation that may not have access to or knowledge of certain technologies, building an app-based loyalty program is not likely to be the best option to benefit your customers.
3. Carefully Consider Your Budget
How much can you realistically invest in building and launching your new loyalty program? It is not only the initial start-up costs to consider, but how running and maintenance costs might factor into your monthly or quarterly accounts. Once you have your program live, can you afford to keep it going? Will you make a return on your initial investments, and will it bring in a profit to offset its costs?
4. Do Your Research
What rewards program system is best going to help you meet your goals?
There are various types of loyalty programs:
Points-based loyalty programs are the most common and the simplest: spend more to gain more points. The points accumulated by the customer’s repeat purchases than translate into a reward – often a special discount, deal, or exclusive product. Points are usually tracked on a points card that acts as the gateway to the rewards program.
Credit loyalty programs give customers loyalty credits for spending money in-store or online. The credits are directly transactional and can be used when saved up to offset the cost of a future purchase.
Tiered programs give customers further incentives to spend with your business as the more points they earn, the closer they are to reaching the next loyalty level, with better rewards/benefits.
Member clubs where customers pay a monthly or annual fee to access exclusive services, discounts, opportunities, or products. Business clubs like Prosper2 provide exclusivity and high value for money rewards to their members.
There are many methods you could follow when establishing your loyalty program, so it is imperative you thoroughly research how each type of rewards program is structured and what benefits they have for you or your customers. You should also be able to choose one that suits you budget and your business size.
5. Create The Ultimate Branding and Message
Make sure your rewards card or loyalty program is instantly recognisable. Superdrug’s Health & Beautycard is synonymous with the brand and its customer engagement practises. Your branding for the rewards program needs to be unique enough that consumers know it is a different facet of the business but it still needs to connect back to your overarching company branding. You also need to think about how you want your customers to view and use the program. Is it a fun addition to their customer experience that allows them to collect points and complete levels? Or, is it a critical part of being a ‘proper’ client, where you can only truly benefit from the company’s services or products if you are a member of the rewards program? Is it your direct line of communication to customers? Make sure consumers are aware of how they can use the program and how it will benefit them.
6. Connect with a Third-Party Provider
Continuing with our dissection of Superdrug’s Health & Beautycard, the rewards system has a points card and an app that are inextricably linked. While the card is the key into the loyalty program, the app acts are the customers landing page where they can truly reap the rewards. The Superdrug app allows customers to shop online, track loyalty points, track packages, and access special offers. However, creating an app does cost time and money. You might not have the budget to build your own POS system and app to track sales, allocate points, and help make the customer experience hassle-free. There are many third-party technology platforms that give you the option to use their ready-to-go software. Many of these providers give users the option to customer and brand their loyalty programs using the pre-existing system they have already built. You should be confident that your potential third-party provider will help you meet your business goals, provide you with the correct metrics and accurate data, and have the right security in place to properly adhere to GDPR and customer protection laws. They are a great option if you want to build an app for your customers to use but don’t have the budget to build one from scratch.
7. Collect Your Data Effectively
The data your loyalty program could potentially track for you is a critical aspect of understanding and valuing your customers. It will help you measure the success of your loyalty program, what is popular, how your customers are using it, what could be done better. It also allows you to gather important information about your customers, helping you build customer profiles. If a customer isn’t engaged or hasn’t been active on your system for some time, having access to their purchase history so you know what products or special offers might entice them back is critical for re-engagement. Your data will help inform decisions and can prevent you from making costly missteps.
8. Market Your New Program Properly
This is a given, but it does not mean you have to launch a huge, nationwide, expensive campaign. If you have physical stores, training cashiers and customer-facing staff to mention the loyalty system at checkout or while helping is a great way to inform your customers that it is there for their benefit. Having information cards on how customers can sign up that can be easily slipped in with their receipts will not cost you a lot. Window sign and online marketing campaigns, primarily through various social media platforms are also a great way to announce and launch your new program. Ensure the information is easy to understand and that the link to find out more is easily accessible. Using a scannable QR code on your print marketing is one excellent method.
9. Keep it Simple
This is a lot of information to digest. Sometimes, keeping it simple might work best for you. If you are overwhelmed by all of the possibilities of how to build your rewards program, keep it simple. Start off slow and ease yourself into the development of your loyalty program. It will inevitably grow with you as you continue to run and expand your business. Sometimes, simply having a trusty stamp card for customer purchases is the best way to start.
10. Ask for Feedback
Your customers can provide invaluable feedback on how they would like you to improve your loyalty program, and what would be a good way of expanding and facilitating customer interaction. You can gain feedback by offering incentives for completing questionnaires, by efficiently logging comments and messages from customers, and by keeping track of any complaints that could highlight some issues you didn’t initially see. Gaining information from the people actually using your system is what helps you grow and improve.