If you think, that rewards and loyalty programs are only for multinational companies, and that your small business can never leverage the perks of such programs, think again!
Yes, global brands from the likes of Tesla, H&M, Starbucks, Nike among others have greatly benefitted through loyalty programs, and with the help of innovative ideas and smart execution rewards programs for small businesses can also deliver great results and high ROI.
If you are skeptical, allow us to answer some of the pressing questions you may have about the rewards program for small businesses.
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Is It Worth the Investment?
In simple words, reward programs are a small price to pay in exchange for customer loyalty, a stronger customer base, brand credibility and long-term business sustainability.
Rewarding your customers after every purchase or transaction might seem quite excessive especially for medium to small-scale businesses but compared to the millions you might spend on advertisement and promotional campaigns, this is a nominal investment. The investment also depends on the kind of incentive you reward your customers with. The reward doesn’t have to be extravagant; it only needs to be exciting enough to motivate customers to repeat their purchase behavior. Another strategy to save costs on incentives is to offer a discount on your own products as rewards. It is a common practice to reward your customers with points that could be redeemed on their next purchase with your brand.
A rewards program is a long-term investment. It ensures customer engagement, shorter sales cycle and also acts as a brand-building activity.
Why do I need a Rewards Program for My Business?
A rewards program for small businesses has multiple advantages, let’s look into some of them.
- Helps with Customer Retention – An engaged customer is a retained customer. Loyalty and rewards programs are some of the most efficient strategies to keep customers engaged with your brand. Customers enrolled in a reward program not only are more engaged with the brand but they also spend more time and money on the brand as compared to other customers.
- Increases Customer Lifetime Value – Customer liftedtime value is the net profit generated by a given customer throughout his buyer journey with the brand. Rewards and loyalty programs motivate customers to keep spending more on the brand and this has a significant impact on customer lifetime value.
- Helps Improve Brand–Customer Relationship – Maintaining a good relationship with your customer can go a long way in improving customer and brand loyalty. A rewards program lays the foundation for this relationship which when nurtured adds tremendous value to the brand, especially in the long run.
- Helps in boosting Customer Loyalty – A loyal customer is an asset. A rewards program ensures a long-term association between a brand and customer, thereby positively influencing a customer and turning them into brand loyalists. A loyal customer sticks with the brand and is undeterred by price fluctuations.
- Helps with Customer Advocacy – A satisfied and happy customer is vocal about his preferences and opinions. Thanks to the rewards programs, the customers are likely to refer friends and family members. With improved customer experience and satisfaction levels, the transfer of trust will bring in more customers to the brand organically and it helps save millions in customer acquisition.
How Do I Set Up a Rewards Program For My Business?
Just like any other marketing strategy setting put rewards program for small businesses is a systematic process. Here’s a step-by-step guide to help you set up a rewards program.
- Have Predefined Goals – Probably one of the worst decisions you could ever make is to adopt a strategy solely because it’s “trendy” and everyone’s doing it. Introspect about your marketing objectives, analyze data at hand, scrutinize your buyer’s journey, and design your rewards program accordingly.
- Study Data and Analytics – Make data and analytics your best friends. Study your demographic through the data you have accumulated, it will also give you insights on their preference, point out flaws in your existing marketing strategies, and help you design a better program that is more engaging and appealing to your audience.
- Select an Appropriate Program Structure – There is a wide variety of rewards or loyalty programs for you to choose from. Depending on your brand personality, demographics, and marketing objectives select a program that you know, your audience will be excited about. You could opt for a points program, a tiered program among many other options, or even design your own, with the help of loyalty experts like Annex Cloud .
- Shortlist a Suitable Reward – The hero of your reward or loyalty program is obviously the reward itself. The selection of a suitable reward is a crucial decision, one that needs to be taken after careful consideration. You need to select a reward that excites your customers and one that you can easily afford.
- Track Customer Satisfaction – After you launch your rewards program, it is imperative you track its performance and gauge your audience’s reaction to it. Simple techniques like the Net Promoter Score will help you gauge customer satisfaction and show you how well the program is being accepted by your target group.
- Be Consistent – Lastly, it is extremely important to remain consistent with your rewards program. You cannot launch a program just for a couple of weeks if you want to see real results. Also, making frequent changes in the program, won’t work in your favor too. Once you have set your rules and guidelines, don’t tweak them unless you want to cause confusion and disinterest to your audience.
What Are the Standard Prerequisites?
To launch and efficiently run a rewards program for small businesses, you will need an expert team to run the operation. The expert team can also help with technological capabilities to manage data and analytics and a dynamic platform that offers bespoke loyalty solutions that are best suited for your business practices. The experienced team at Annex Cloud will carefully study your brand and design loyalty solutions that match your business and help you attract, engage, and retain your target audience.