Creating loyal customers is a profitable business
Major brands realise this. You only have to look at how much they are investing in their loyalty schemes. A lot of time and resource has been spent in creating and developing projects like the Nectar card, the Boots Advantage card and the British Airways Avios and tier points. Coffee chains such as Costa Coffee and Café Nero have developed complete apps around building loyal customers.
A lot has been written about how these schemes are built around customer data. But at the core of what they do is to keep customers coming back and buying more. There is an important business principle here.
The lifetime value of a customer matters
If you are a small business you probably spend a lot of time, money and effort to attract new customers. But this can seem a lot of work if they only make one purchase.
We want our customers to keep returning. All the effort spent in attracting a new customer is a lot more worthwhile if they come back and buy again and again. If we know the lifetime value of the average customer then we know how much we can invest in attracting new clients. This is sound business practice for the major brands, but not everyone is convinced it can be scaled down.
Can small businesses afford loyalty schemes?
Remember, it is not necessary to have a complicated card scheme or to design your own app. Creating constant customers need take no more than printing a simple loyalty card.
Here are three easy steps to starting your own loyalty scheme
- Design a loyalty scheme. If you are a coffee shop you can offer customers a free tenth coffee or a free cake with their tenth purchase. It is still easy to create a loyalty scheme if your business is a little more complicated. Our local greengrocer offers a free loyalty point for every £5 in a purchase. When you have spent £50 you get 10% off your next shop. This always encourages people to spend more as well.
- Offer people an initial incentive. For instance, pre-stamp the first two spaces on your card. Studies have shown that this increases the use of loyalty cards: customers feel that they have already been given something for nothing.
- Get your card designed and printed. This is easy. At Where The Trade Buys you can order easily online and upload your artwork. Equally, you can design your card using our online designer, which has a huge range of templates for you to use.
At the time of writing, we offer 500 loyalty cards from just £22.82. That’s under five pence per customer in order to build loyalty. At this cost, there is no reason not to test it with your customer base. After all, creating loyal customers is a profitable business.