Should every business jump on customer rewards bandwagon?
Almost every one of us during our childhood days, inevitably heard this very common line from our parents, “If all your friends were jumping off a bridge, would you do that too?” To think of it now, it sure makes sense. Just because something is popular doesn’t necessarily make it good, and it is always a good idea to justify and ponder for yourself. The same is applicable for businesses as well when it comes to choosing customer rewards programs.
The first question that you must ask yourself is, “Should you jump on the customer rewards program bandwagon?”
In the current business scenario, there are certain elements that are omnipresent across the board, especially in Fortune 500 companies. Either these companies have been around long enough to be unanimously seen as essential, or sufficient businesses have established their services as valuable practices that would probably give your business a competitive disadvantage by instituting.
Although there might be a lot of must-have business aspects, but the one that would immediately connect and be on top of the people’s list would be customer’s rewards program. Loyalty marketing has been around for decades. The advantages are well known – be it increased customer spending, higher customer engagement and retention and finally, customer loyalty. It comes as no surprise to know that almost every Fortune 500 company has a rewards program to offer. So, should it be wise for small businesses to incorporate loyalty programs, or should they wait till they become larger? The following pointers will guide us through:
The value of implementing a customer reward program
Loyalty programs elevate the customer’s spending behaviour, increase the frequency of customer visits, which is really good for businesses. They also help market your business as happy customers prove to be brand advocates spreading their positive experiences through word-of-mouth referrals, which are proven to be one of the most effective forms of advertising. By tracking spending habits, you can analyse insights like which items are most popular, what days and times are the busiest, and which items are most commonly purchased at random.
If customer rewards programs are so awesome, then why every business does not swear by it?
Well, for starters, it takes time to initiate, design and implement and work, especially for small
businesses that have limited resources. One could start with a very basic punch-card system where buying a number of items unlocks a free one. This neither requires any planning or research nor does it involve any significant cost. But on the downside, these reward systems won’t guarantee you, excited customers or brand advocates.
Digital loyalty programs sure add that touch of sophistication to your business:
Digital loyalty programs help in tracking customer spending behaviour. Analytics provide you with insights on spending data and other relevant customer information that you can utilize. Larger companies are more likely to have sophisticated rewards programs with swipe cards. Also, a nominal monthly fee adds the same aura to business, even if it works as a single window system.
The downside of not doing customer loyalty right
An inspiring, out-of-the-box, and polished reward system will launch your small or medium-sized business into the same frame with the established biggies in terms of loyalty marketing. If setting up program on your own is not feasible due to lack of time or sufficient knowledge, roping in a third party company to set it up for you might be a good idea, because it comes as no surprise that the damage caused by a loyalty program gone-wrong is much worse than not having one at all.
Don’t be in a hurry to launch a creative loyalty program:
Taking sufficient time to soak in the motive behind a successful program and utilizing the perks that you will benefit from it is the stepping stone to creating a successful loyalty program. Being honest about having the time and skill to run it is the next step. If not, there are companies that will do it for you for a fraction of the cost.