Build a Loyalty Program that Works

You want customers in contact with you and your business. That’s why you want a loyalty program.

Loyalty programs are a dime a dozen, aren’t they? As a business owner, if reps aren’t knocking down your door to sign you up, you’re getting blitzed with spam in your inbox.

Unfortunately, most people who run loyalty programs are interested only in your money, not in getting you more business. They lack the market knowledge and a true understanding of building your platform into repeat customers. So here is a list of 5 easy tools to include your loyalty program for more success.

Note: These tools will not be able to be implemented in every industry. The non-negotiable that you have to have will all have an asterisk* next to them.


1*) Make sure that your program is trackable

Did you see the asterisk? You have no choice on this. If you are going to measure the success of your tool, you have to have items in place to measure that success. Measurability will also reveal opportunities for more successes. This may be software for your computer or a specific tool on your cash register. What it is NOT is a box full of clipped coupons underneath the cash register. It’s the Information Age, tell the Stone Age guy to take a hike.

You must be able to track transactions (redemption) and the cash value used. Good things to look for in addition are average ticket prices and automatic systems of loyalty rewarding.


2) “Buy 10, Get 1” deals suck. Leave it.

Do 10-punch loyalty cards actually influence your buying decisions? They don’t for me. After I get to a restaurant and order food, I remember that the loyalty card might be in the wallet. No decision-swinging occurred. Why is this? Because your customer gets a 10% discount after they spent ten times the purchase price. Plus you as the business owner are dealing with your minimum wagers that punch four times for their friends. And for one more layer of slop in the pan, you can’t measure any success for purchases 1-10, only after the 11th visit.

Why not just offer 10% every time they access the loyalty program? It’s immediately trackable and your customers receive an immediate reward. If you can’t afford a 10% discount every single time, raise your prices by ten percent, then discount.


3) Graduate the reward

Many mobile games on Android and iOS use this tool and it works great. Every day you log in and play, you get something. The more days that you consecutively log in, the greater the reward.

Translate this into your business. Here’s an example: after 5 visits, throw a $5 gift card in their bag. After 10 visits, give them 50% off any item in store. After 15 visits….you get the idea. The idea is to bring them back after they leave.

Note: That’s just an example. Don’t steal it without actually running it through the filters of your business and make sure it will work. 50% on one item is horrible if you sell cars.


4) Give sign up bonuses

You want their information, not their Facebook like. Someone once told me that to get a follower on a social media page is to borrow them but to get them subscribed to you is to become their roommate. So offer bonuses! When they signup for your loyalty program, give them coupons, discounts, bundle deals etc. Craft it around your best selling items/services so that your customers not only see the best of what you have to offer, you also convince them to develop a regular habit of shopping with you.


5) Keep It Simple, Stupid

Customers do not want to read eight lines of fine print underneath a catchy header. It feels deceptive and uninviting. Keep it simple, go above and beyond, and make your customers feel happy about buying your product. That’s why they’ll come back time and again.


Now if you are seeing all of these discounts as losing money, don’t. A discount is a great thing. You cut your margin on that item, sure. But how much do you make when the customer shops your competitor? How much do you lose when the customer buys one item at a discount and then buys a few more items at full price? You want them in contact with you and your business. You want them to be satisfied with you and tell their friends. That equates to business success.


  • ivanpw

    Thanks for the mention, Jeff! Much appreciated!

    • Jeff Brown

      Absolutely, Ivan. It’s a pleasure to work with Noobpreneur and the small business mission you have!