Is Customer loyalty for small business important and if it is how do you go about it? Here we lay out a plan that works for you
Estimated reading time: 9 minutes
Table of contents
What is loyalty worth?
We were discussing this recently about our local Supermarket and how well we get ignored.
You will understand the cost of a shopping trolley filled with the week's supplies. I know there are a couple of hundred and we have no kids to feed and live without excesses.
We have shopped in this center for just 10 years, every week except a few holiday times.
In my calculations, that's a tad over $100,000. A customer on the low end of spending.
They do have a discount card so I get a few percent back in cash. Am I a good customer?
My car Loyalty
You should be told I buy cars and my wife goes shopping so we have different loyalty. This is not sexist, she does not trust me to shop, won't even let me ride the trolleys so I let her do her thing.
Over 10 Years I will spend nearly the same on cars as we do on Eating so it's a pretty even match.
However, I won because I still have something to show after 10 years.
That is not my point though, I get a birthday card every year, I get invited out to new model presentations, I can drop in anytime for a coffee and receive regular email content.
When I go to the dealer they are all over me like they love me and respect me.
At the Supermarket, my wife gets a nod and has a good day's wish from a bored 17-year-old.
My car dealer cares about my business and the supermarket cares about turnover.
Do you see something wrong with this?
Big chains are different. Coles and Woolworths fight for your business with gifts and giveaways, incentives and promotions, they email, they send brochures, and have premium rental properties with wide aisles and trollies without broken wheels.
They want your business and are prepared to fight tooth and nail for it.
We have a lot more on this and many more subjects with the training program at Wealthy Affiliate.
Loyalty is one of the key controls but to be on top of your online marketing for small businesses you really need to go the extra length.
Customer loyalty for small business and cards
Coffee cards are a waste of space
On the other end of the deal is a small coffee shop.
Within a few miles, I have a choice of about a dozen outlets that I can buy a daily fix.
Most have a stamp card for frequent purchases and I have a wallet for them all. If ever I reach ten I get free coffee.
Do they make me buy from them?
Not the one I mostly use does not have a card system but gives me a small discount because I bring my own cup. They know what I drink, they talk to me because I am special not because I have a card.
The concept of loyalty is touch
The more times a business touches you the greater the chance of you returning.
The coffee card system does not recognise you. They don't have your name or email, they rely completely on greed to bring you back. OK, it works to a degree but I believe it to be a waste of time.
I went to a local recently, took my wife and ordered a coffee and a cup of tea plus a nice sickly cake we did not need.
I presented my card and she stamped it once. Hang on, I said I bought a coffee and a tea that is two stamps. Not here she said “that is a coffee card and not a tea card.”
I wondered at the wisdom of this and decided that I would vote with my feet, the concept is so wrong that they lost a customer over a lousy $0.20
The problem with these cards is they have no identity.
Not all gifts work to create loyalty
I look around my desk as I write this and can see at least five free gifts from people wanting my business.
In fact, most are from real estate companies in case I want to sell my house. None are tied to an identity so I have no relationship with them. I recently listed my property with someone from whom I had no gifts but lots of emails i.e. a relationship.
Real estate companies are moving with the time
Where I live many of the RE companies have gone digital. If you view a home open or inquire they mail you the property details after soliciting your email. You are now on a list for life.
New properties, changes, home opens are all coming to you and creating that magic touch.
No more gifts, well not as many, but a better process in customer contact.
They want your business and are working for it using low-cost technology.
We all love a freebie
You will get no argument from me about accepting a gift to solicit my business. However, the gift must come with some personal value that means something to you.
The big retailers do this with discount cards that you get in the mail. Thank you for shopping with us here is $20 for your next visit.
Now $20 has more perceived value than 20% because it has a value you have to spend.
Are they right? I think so.
Best customer loyalty
We will recap here but first of all, it is one that gets customers returning to spend money with you, and or recommending you to others.
My Grog store has a discount on every purchase.
The supermarket chains have novelty gifts.
McDonald's has low-cost value offers and toy gifts.
Golf clubs offer a free Buggy.
Airline extra legroom.
Makeup companies give away samplers.
These are all things that offer a solution and keep you engaged.
When the major companies provide free or benefit offers all the time you can bet they work. They test and try with the best resources so they know the answer.
Coles recently had a mini product release that had a huge quarterly increase in sales. They had just launched it a second time but Woolworths counter-offered with Lion King Figures to offset the effect. It's a tough life in marketing.
The car manufacturer Kia offered a seven-year warranty when everyone else had a three-year warranty. That is brazen stuff
What's more, when others match Kia they intend to go for a 10-year warranty and capped-price service.
Customer loyalty for small business with Uber
The Uber story
Uber has built a business on giving away free rides. Yes, the first one is free to enjoy the experience. They still do it to capture more customers and they go out of their way for you to enjoy the experience.
Many even included a free bottle of water for the rider. Cost about $0.30 benefit enormous.
Did it have real value? Yes, it did and that is why it worked.
Consistency and value
I have set out to show how consistency and value are the two key ingredients to customer loyalty as proven by the market.
A $20.00 card is better than a 20% discount even if it is less.
Consistent marketing material is necessary so knowing your base is essential.
Applying loyalty to a small business
My Daughter runs a women's clothing shop. Her point of difference is allowing clients to take home products, try them on and either buy them or return them.
This shows trust in the client and really an obligation to buy things.
Another friend has the latest clothes sent to her for appraisal. I think you will like this approach. She buys, she returns but she continues to shop with them.
I run a business where we provide a free two-week trial at no cost. This has value and a high take-up rate.
I went to a major hardware group for something to fix a latch on a gate. I gave up and went to a local guy. He told me exactly how to fix the gate without buying anything. Where do I shop now? I got free value.
Have you ever been upgraded to a Plane or hire car? maybe just a pizza, it is valued and makes you special.
Just using a customer's name is a value. It works in every business where you are recognised and respected.
Customer loyalty and small business where difference matters
Every business is different
Your business will have its own value to give away so use it wherever you can and push it hard.
If you go into any of the big stores the first question is are you a member and if not can we join you now?
They want your details so they can market them to you. However, they are prepared to pay for it as well by the VIP extras.
They seek consistency so shouldn't you do the same?
Conclusion
I hope I have shown you how value and consistency will provide a continual flow of customers into your business. Add to that the management of your customer list
as a conduit to your loyalty channel.
You must also push your staff to take this on board and work it to the end. VIP card, cash voucher, something for free, anything that suits your business.
Leave it and you will lose the race to the end.
Customer Loyalty for Small Business by Peter Hanley
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