How To Implement Loyalty Marketing On Your Small Business

How To Implement Loyalty Marketing On Your Small Business

The landscape of business today is very dynamic and competitive. Small businesses have a challenge when it comes to keeping customers in a world where competitors are just a click away. Startups need to know the various techniques they can implement to acquire and retain potential customers. Winning customer loyalty is one way to ensure that a competitor doesn’t win them over. 

Rewarding customer loyalty is essential for the growth of any small business. Holding on to 5% of your existing customers can increase your profits by about 25% to 95%. One of the easiest ways to establish a solid regular customer base is by creating a loyalty marketing program. Although earning customer loyalty is challenging and not even guaranteed, there are some time-tested methods to help you achieve your goal.

What is loyalty marketing?

Loyalty marketing is a marketing approach businesses use to retain existing customers by giving them incentives such as vouchers and discounts to keep them engaged. It is also a strategy to widen your network reach to encourage new customers. 

If you are looking to implement a loyalty marketing program, it is essential to start by building a loyal customer base. This will provide a solid foundation for your program’s success in the long run.

Tips for building a loyal customer base

A loyal customer is not only more likely to make repeat purchases but also, to refer their friends and family to your business. This can lead to long-term success and growth for your company.

Here are some of the ways to create a loyal customer base:

1. Provide exceptional customer service

As a small business owner, ensure top-notch customer service to every client who walks into your store. This will help to make a memorable first experience and instil trust in the customer.

Good customer service makes customers stay loyal to brands. In fact, approximately 70% of consumers spend more money on a business that delivers excellent service. Offering outstanding service to your customers can give you a competitive advantage since you might need help to outspend your well-funded competitors.

2. Value customer feedback

Customer feedback is critical to any business that wants to attract and retain customers. When you value your customers’ feedback and act on it, they are more likely to do more business with you. Implementing customer insights in your small business will help to improve the quality of customer experience, thus gaining loyalty and trust in the process.

3. Create an online community

Most businesses today use social media to engage with customers actively. These communication channels provide customers with a portal to learn more about your company, products, and services. They are a convenient place to share informative content, announce the latest offerings, and run contests and campaigns. Customers who join your online pages continuously interact with your brand and feel like a part of your community.

How to implement your loyalty program

Implement your loyalty program

Suppose your business already has a pool of loyal customers, and you already have a loyalty program in mind. The next step is implementing your marketing campaign as smoothly as possible. Here are some steps to successfully implement your loyalty program:

1. Define your customer persona and goals

Start by creating a customer persona that describes your ideal customer. This will help you understand their needs and motivations and tailor your loyalty program to meet their expectations.

Once you understand your target audience, you can set clear goals for your loyalty marketing campaign. Do you want to increase customer retention, boost sales, or both? Your specific goals will help you measure the success of your program and make adjustments as needed.

2. Choose the right loyalty program type

There are many types of loyalty programs, from points-based systems to tiered rewards programs. Consider the program type most effective for your target audience and business goals.

  • Points-based system: Customers earn points for each purchase and can redeem them for rewards such as discounts, free products, or exclusive experiences.
  • Tiered rewards programs: This kind of program offers different levels of rewards based on the customer’s loyalty status. For example, customers who make a certain number of purchases or spend a certain amount of money might be eligible for a higher level of rewards.  

Another option is to offer exclusive deals and promotions to loyal customers. This could include discounts on future purchases, free shipping, or access to exclusive events.

3. Define rewards and incentives

Consider which rewards will appeal to your target audience and which are most cost-effective for your business. Some rewards you might consider offering include:

  • Discounts on future purchases
  • Free products or services
  • Exclusive experiences, such as personalised consultations
  • Cashback rewards
  • Free shipping

You should also consider the frequency and value of rewards. For example, you might offer a small discount for every purchase or a larger discount after a certain number of purchases.

4. Implement your loyalty program

Once you have defined your loyalty program and rewards, it’s time to implement it. This might involve setting up a points system, creating rewards catalogue, or developing a system to track customer activity and rewards. 

You must make the program easy for customers to participate in. This might involve creating a mobile app, integrating your program with your e-commerce platform, or offering in-store or online sign-up.

You should also consider how you will promote your loyalty program. This could be through email campaigns, social media posts, or in-store signages.

5. Monitor and adjust your program

As you run your loyalty program, it’s important to monitor its performance and make adjustments as needed. This might involve tracking customer activity and engagement, analysing the effectiveness of rewards and incentives, and making changes to your program based on customer feedback.    


Loyalty marketing is all about acknowledging your customers and making them see that you greatly value and appreciate the support they are giving you. Implementing a loyalty marketing program can be a powerful tool for small businesses looking to increase customer loyalty and boost sales.


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