Getting every customer back in through the door is tough. It’s even tougher when there’s so much competition around you. So why is it important to keep your customers happy? Because of the 80/20 rule! The 80/20 rule states that 80% of your revenue comes from 20% of your customer base. So what does this teach us? That businesses need to focus on their most profitable and valuable customers, and not spend too many resources on unprofitable customers. This is why it’s crucial for businesses to get loyal customers back in through the door and get them to spend more when they do.
Merchants already have an idea that their loyal customers are the money-makers but what are some solutions that they can tap into?
Customer Loyalty Software Programs
As merchants already know, there is a wide variety of SAAS companies who provide loyalty programs for
businesses but these programs can run up a small businesses’ budget. Popular loyalty programs like Belly,
FiveStars, and Flok have monthly subscriptions that ranges anywhere from $200 to $400. Although these types of programs are very advanced and gives you great insight on how well your business is doing in retaining your customers, they tend to be too pricey for the standard mom and pop shop. On top of that, SMB owners typically don’t need the hardware (tablets, touchscreens, etc.) that come with these programs. They need something quick, efficient, and easily trackable.
Albeit a bit outdated, punch cards are another method that businesses have been using to drive repeat traffic. Although punch cards are a much cheaper option than software loyalty programs, merchants aren’t able to gather meaningful information and data about their customers. A common occurrence is a customer who has gotten 9 stamps on their punch card. On their 10th, they get a free drink on the business. Next time the customer comes in, they realize that they’ve lost their punch card. The dilemma is: does the owner conform to the honor system and give the customer their free drink? Or does the owner ask the customer to earn up to 10 stamps again? This kind of problem is common in businesses that use punch cards. It seems to do more harm than good in most instances.
Loyalty Through Experience
Some brands like Apple, provide a unique first experience for their customers so that loyalty to their brand is baked right into the product. If your company is pioneering a new product or service, a loyalty program may not be necessary. Customers will be loyal because there are few other options as spectacular as you, and you’ve communicated that value from your first interaction. However, if your product is as spectacular as the new iPhone 7 coming out, I wouldn’t bank on this method being very effective for you. Customers are fickle and don’t always stick around to see what’s next.
Store Offers/Flash Sales
A great way to build loyalty with your customer base is through the deals that you give them. People are deal-seekers and love any discounts or special offers that you can give them. A great way to have customers remember your brand while driving additional revenue is through running a BOGO campaign. This kind of campaign drives double the traffic in store. One gift for a friend, one for your customer purchasing the offer. In addition, this campaign helps drive gift card sales during non-holiday seasons and low periods. Over the 2015 Holiday season, a Buy One, Get One campaign resulted in over $40,000 of eGift Cards sold. Consumers loved it, driving a high redemption percentage of 43%. As a result, a large number of customers who received promotional gifts came in store to buy.