If you’re a fledgling franchisor, a loyalty program to help franchisees’ customer retention should be in your plan, advises consumer expert Amanda Stevens.
When you think loyalty program, you probably think big, flashy brands with big bucks to spend. Maybe you think of the local gym franchise, with gold plated loyalty cards and rewards worth thousands of dollars.
Or, maybe you think of big department stores who offer large discounts which your business just can’t afford. You probably think, ‘it’s too early to start a loyalty program. I’ll do it later, when I have more money and customers’.
This doesn’t have to be the case! Loyalty programs are an excellent technique for any business, of any shape or size.
Why loyalty programs work
Loyalty programs have been around since retail was invented (almost!). They work because they tap into how our brains function. We are all wired to respond to rewards and recognition. Our work, our relationships and our habits are all dictated by reward. Loyalty programs use this behaviour to encourage customer loyalty.
People love to feel appreciated. They also love the feeling of a getting a good deal! Loyalty programs achieve both of these things.
Why you should have one
Loyalty programs are not just for big businesses who have tonnes of cash to splash around. Here are three reasons, you need a loyalty program:
- Guarantee return customers
- Create sales
- Increase brand familiarity
- Get referrals
Loyalty systems are a great technique for growing businesses to acquire loyal customers and capture the attention of new customers. Programs don’t have to be expensive or complicated.
Keep it simple and be generous
Don’t go over the top with your new loyalty program. You don’t need fancy cards – in fact, you don’t even need any cards. You can use an online system which stores customer information and avoids the cost of printing cards.
Don’t have complex reward programs, use a basic formula that makes sense to the customer and you (i.e ‘every $50 you spend, get $3 back’).
I know, your budget is tight. But there is no point in offering customers rewards that are petty – they won’t appreciate or use them. A stingy loyalty program is worse than no loyalty program at all.
Think of creative ways that you and your franchisees can afford to be generous. Whether you choose to give discounts, freebies or some other form of reward – be generous.
My top tip for cash-strapped businesses is to partner with another business and offer their services or products through your loyalty program.
When is the right time?
So, is it too early to start a loyalty program? No. If you have an newly established business with some clients, you’re ready.
You can design a system tailor made for your client base. How do your customers really want to be rewarded? Ask them! Make them feel the love. The more rewarded your customers feel, the more likely they are to be loyal.
Loyalty programs are popular for a reason – they work. Don’t be intimidated by other businesses’ programs. It’s not about how much money you have or how many clients you have. It’s about expressing genuine gratitude, generously.
Amanda Stevens is an author, speaker and consultant on buying trends and customer experience.