Increase Sales with a Loyalty Scheme

Jon Richardson • May 16, 2021

Grow your business with a Loyalty Scheme

mobile apps for small business
Loyalty cards are a great marketing tool they increase sales for your business as they encourage your customers to purchase from you more regularly and provide the customer with a discounted or free product.  

Research has shown that customers who participate in a loyalty scheme generate up to 20% more revenue than customers who aren’t participating.

Loyalty schemes aren’t just for the big corporates anymore they have been adopted by coffee shops, bars, restaurants, pubs and takeaways of all sizes. We have seen many small businesses in the Bournemouth, Christchurch and Poole area and the New Forest benefit from the implementing a loyalty scheme with increased sales.

But the benefits are much more than just increased sales. This blog looks at those benefits.

Customer Retention

Securing a new customer can cost 5 times as much as keeping an existing one. It makes good sense therefore to make every effort to retain your existing customers. Building customer loyalty can have an exponential impact on growth as loyal customers will spread the word. 

Customer Satisfaction

A loyalty scheme provides just that and shows your customers that they are valued. Let’s face it everyone loves getting something for nothing and when they do they will think more highly of your business.   When faced with a choice of venues the majority of people will choose the one with a loyalty or rewards scheme.


When your customers think highly of you they will tell their family and friends and mention you in their social media channels. These personal recommendations are the most effective form of marketing and will bring you more customers.

Increase the number of sales

Research has shown that loyalty schemes increase the frequency of purchases from your customers. The nearer they are to the reward the more the frequency of purchases increases. You will find that the nearer a customer is to getting their free beer or coffee the more you will see them

Increased Average Order Size

You may be a coffee shop offering an incentive such as a free coffee after every 5 purchases but you will find that customers will also buy additional products that aren’t included in the loyalty scheme when they are in your café such as a pastry or chocolate bar etc

Influence Spending Habits

Loyalty cards can also be used to promote certain spending behaviour. You can increase the points or stamps a customer gets if they purchase a specific service or product that you want to promote. For example if you are a coffee shop and have just launched a new blend of coffee you can offer your customers double points for trying the new coffee

Exclusive Discounts

Many coffee shops, restaurants, takeaways and bars also provide an ongoing discount for members of their loyalty scheme. That might be a blanket 5% discount across all coffees. This ‘exclusivity’ can create a sense of community as the members may see themselves as a distinct group.  

Loyalty Reward Options

Discounts. Offering a percentage off an order after a certain amount of purchases is often used. For example you may provide a 20% on every 5th purchase.

 

Free products or services. Alternatively you may offer a completely free product or service for after a set amount of purchases such as get your 5th coffee completely free if you are a coffee shop. These tend to be more effective as they are completely free with no conditions attached. 


These types of reward can also promote certain products that your customers may then start buying regardless. For example if you are a hairdresser you may give away a free bottle of conditioner after every 3rd haircut.

Different types of Loyalty Schemes

There are different variety of loyalty cards your outlet can offer:


Points based loyalty schemes:


Points can be used to reward customers for their spending, with the more they spend the more points they earn. This will help to encourage your customers to spend more to earn more points. You may want to have a minimum spend to get points, usually this will be just a bit more than the average spend or a single purchase.


Stamp Cards


A simple binary scheme such as buy 5 drinks / meals and get your 6th free. Having a simpler approach tends to be very effective for businesses like coffee shops, restaurants, bars and pubs. 

Loyalty cards can also be offered where exclusive discounts can be redeemed through the card, making those customers feel appreciated and valued.

Paper or Mobile App

Most of us will have at least one paper loyalty card in our wallet or purse, whether it is for our local coffee shop or café or a supermarket. However, there is a move towards going digital with loyalty schemes.


Many companies have implemented a mobile app for just this purpose. Mobile Apps are now much more affordable even for very small companies.  Whether you are a local micro pub, fish and chip shop or a small retailer a mobile app is very affordable and as with all good marketing tools it should generate more revenue than it costs.


The benefits of a digital loyalty card on a mobile app are many, reduced printing costs, they are less likely to get lost, the scheme can be changed and implemented easily. Additionally the mobile app can deliver other functions such as online ordering, table booking, and push notifications to promote the loyalty scheme and other marketing initiatives.


Mobile commerce or mCommerce is huge in the UK to find out more about and small businesses should be factoring this in to their marketing strategy.  Read my previous blog to find out more about mcommerce.


Find out more about how a mobile app can grow your business.

Promoting your Loyalty Scheme

Promoting your Loyalty / rewards scheme is an ongoing process. Below are some simple but effective ways you can market your scheme:


  •       Have the cards on display at your ePos stations.
  •       Leaflet drops
  •       Window displays
  •       Promoting on your website.
  •       Briefing staff to mention it to every customer.


If you have gone down the mobile app route you can allow your customers to download your mobile app loyalty scheme directly from your website

Conclusion

Loyalty schemes are a win win for businesses and their customers.  They increase sales whilst giving the customer discounts and making them feel valued which further promotes your business as your customers tell their friends and family about how great your business is.


Loyalty schemes can also be very inexpensive to implement, just the cost of the discount and a little bit of printing.  However if you decide to invest slightly more and implement a mobile app then the benefits can be massive.  You can read my previous blog on how your business could benefit from a mobile app.

 

As well as designing great websites we also build mobile apps for small businesses in Bournemouth, Christchurch and Poole as well as the New Forest and Southampton areas. We have seen first hand how these have increased sales for those businesses and not just the usual companies you would expect like coffee shops, restaurants, takeaways and pubs, but also for small independent shops and even for cleaning companies.   


If you are wondering whether you should implement a loyalty scheme or digitise your existing scheme with a mobile app then please get in touch for a free informal consultation.

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