boost sales with a customer loyalty program

Imagine this: You open a brand new store with a very successful grand opening. Crowds of people come in, walking past the colorful balloons and “Grand Opening!” sign you have up. New customers browse your wares, make purchases, and leave. 

Two weeks later, business is slow. Very few people, if any, have returned. You start to panic. Why hasn’t anyone come back?!

Now picture the same scenario, this time with a customer loyalty program: As customers walk through the door, you hand them a coupon worth 20% off when they return, and 30% off if they come with a friend. Suddenly, your situation changes. You have customers returning, bringing friends, and spending more! Not only does this give you additional sales, it makes the customers think of your business long after they leave.

Sounds good, doesn’t it? Encouraging loyalty is a powerful tool.

Getting Comfortable with Customer Loyalty

Now that you want to boost your sales by building a loyal customer base for your business, where do we start?

The first step to building customer loyalty is exceptional service. Ensuring that your guests are well taken care of is the best place to start, but there are also many other things you can do to keep your customers coming back.

“The take home message is crystal clear: Maintaining a solid client base will boost your sales profits and your bottom line.”

A recent article in INC. Magazine states that it can cost as much as five times more to gain new customers compared to keeping the ones you already have. Also, current customers are likely to spend an average of 67% more than new ones. Let’s let that sink in for a moment…Keeping customers you already have is less expensive than getting new ones, and those same customers will spend more at your business. The take home message is crystal clear: Maintaining a solid client base will boost your sales profits and your bottom line. So how do we keep them coming back using a customer loyalty program? Luckily, there are several options to choose from. 

The Many Types of Customer Loyalty Programs

Although customer loyalty programs can be very different from one another, they all share the same goal: keep the customer coming back. Usually, this is done with enticing offers too good to pass up, such as frequent small rewards that provide a sense of instant gratification. (How many times have you gone to a store because you’ve earned a special gift or reward then spent way more than you intended?) This method also allows you to engage with the customer, which in turn makes them spend more and come back more frequently. Here is a list of some of the main types of customer loyalty:

  • Points Programs:  This is one of the most popular kinds of loyalty programs. The name is self-explanatory; customers earn points for certain actions they take in the store, usually purchases. These points can be characterized by dollar amount, buying specific items, or even visits to the store. Prizes are then awarded for redeeming specific numbers of points. Simple enough, right? To find an example, you probably don’t need to look farther than your own wallet. Have a credit card that gives you points for purchases? If so, you’re already familiar with how this works. One option is PinPoint Rewards, which offers a robust program that is point-based and gives you access to analytics and data about your customers and their rewards.
  • Punch Cards:  The Punch card program is the fraternal twin of the points program above. Although it has a family resemblance, it operates differently. There is a physical or virtual punch card with a certain number of required visits, coffee purchases, or dollar amounts spent, leading to a prize, gift, or discount. In this system, it’s useful to have a specific gift or prize outlined in the program, so customers know what they’re working towards. Think of it as dangling a specific, very appealing carrot in front of a horse, so to speak. Without seeing the carrot right there, it’s not quite as tempting. A good example program for this is Perka, which offers a punch card program that is stored on a mobile phone. When paired with a POS like Clover Station, it is a powerful combination.

    To create loyal customers, you must keep your promises. Make sure your loyalty program reflects that!
  • Games:  Who doesn’t like playing games? Customers can earn spins on a prize wheel, entries into a contest or raffle, or tokens to be applied to a game. Here’s an example: Our local grocery store just did a version of Monopoly. Spending $20 earned you a ticket, but buying certain items earned you bonus tickets which could be collected for bigger prizes. Think of the possibilities of promoting an item that isn’t selling as well or you want to feature!
  • VIP Clubs:  VIP programs make your customers feel valued while allowing you to market to them at the same time. You can make it free to sign up for anyone or only allow customers who visit frequently or spend a specific dollar amount. A variation of this is offering levels of VIP status, which increase as a customer’s loyalty goes up. Once the customer is in your loyalty VIP club, you can send special offers, behind the scenes content, sneak peeks, early access to products, or any other bonuses you can think of! By collecting a customer’s contact information when they sign up, you can establish a database that you can use to reach out, keeping your business fresh in their mind.
  • Referral Rewards:  Word-of-mouth can be a powerful tool for gaining new customers. Why not encourage your current customers to refer people to your business with an incentive? A customer who is offered a prize or discount by bringing a friend is much more likely to deliberately sing your praises. An example of this would be a coupon that states “Bring a friend and you both get 15% off your purchase!” One company that does this well is Uber, a hip ride-sharing service that offers an alternative to taxis. Uber’s offer allows a rider to give $20 ride credits to friends, and in turn, earn a $20 credit when the friend signs up and takes their first ride.
  • Gift Cards:  If you don’t offer gift cards at your business, it’s something to think about. Not only does a gift card serve as a referral to whoever receives it, gift cards are like free money for your business. How, you ask? Many times, people will spend more or less than is on their gift card. If they spend more, it’s additional sales. If they spend less and don’t use the whole card, it’s like money in your pocket. It is estimated that at least 10% of the value of these cards is never redeemed, which will add to your bottom line. Another important point: gift cards are popular. A 2014 survey by the National Retail Federation found that 80% of people planned on buying at least one gift card for the holiday season. Looking for an easy way to get gift cards? Gyft offers a simple solution that can involve physical or digital gift cards.


Customer loyalty is a great way to keep your profits going year after year. Whether you choose to offer gift cards, a punch card program, or any of the other options, you should keep a few things in mind. Make sure your target customers will like the type of loyalty you choose. Equally important is keeping a budget. If you build a loyalty program your customers don’t find appealing or spend so much money on it that it’s not profitable, then the whole purpose (increasing sales and profits) is lost. However, with the right plan and execution, a customer loyalty program will help you gain many sales and repeat customers.

Still don’t know where to start with customer loyalty? We are ready and willing to discuss some of your top options, give advice, and make recommendations! Call 888-902-6227 to speak with a small business specialist.

Also, stay tuned for more information on small business insight! We will go in-depth, covering affordable customer loyalty cards, apps, and other solutions for your business.


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