If you haven’t implemented a customer awards system into your small business yet, you’re missing out on a lot of benefits.
Small businesses throughout the country are using awards and loyalty programs at a higher rate than ever before. And with good reason.
More and more small business owners understand how important it is to retain customers and keep them coming back. An award system is the perfect tool to ensure this kind of customer loyalty.
While the type of award system you put in place may differ from what your competitors are doing, the end goal remains the same: retain existing customers by keeping them coming back. This can be done with incentives like store credit, prizes, earned freebies or almost anything else you can think of that will excite your customers.
If you’re debating on launching a loyalty award system or not sure if it’ll pay off, consider these six benefits of introducing one into your small business right away.
Let’s dive in.
- They’re Already Proven to Drive Growth
Obviously, the type of award system you launch with impact how much growth you’ll see. But the fact is that these programs have been proven time and again to drive at least some growth over not having one at all.
This is true in almost any industry you can think of.
Have you ever heard of the growth hacker movement? It’s a collection of business owners and marketing gurus who specialize in growing companies.
They begin by using award systems as the best proven model to start growing and expanding a business. Their sole purpose is to grow businesses and they view customer loyalty as one of the easiest ways to make this happen.
Their track record of success proves this theory to be accurate.
- An Awards System Is Less Expensive Than You Probably Think
You may be one of those small business owners that thinks an awards program will take a big portion of your marketing budget while yielding minimal results.
This couldn’t be further from the truth.
The reality is that marketing to new customers is far more expensive, and less effective, then spending your marketing dollars on awards programs that keep bringing existing customers back.
According to Forbes, keeping existing customers is seven times cheaper than trying to acquire new ones.
So think of it this way: You can spend $100 to gain one new customer, or the same $100 to keep seven existing customers coming back for an equal purchase.
As an added bonus, new customers look for loyalty award programs that are available before they decide to start giving you their business. By having one in place, you’ll keep existing customers and automatically bring in new ones.
Seems like a no-brainer.
- Get a Boost In Your Reputation
Aware systems serve two functions: give new customers an incentive to keep coming back after initially buying your services or goods, and give current, loyal customers the feeling of being valued by you.
Not only will you greatly improve customer appreciation, but you’ll also increase the odds that customers will share the details of how you operate with friends and family. This brings in the added bonus of word-of-mouth advertising.
The more value your program brings, the more they’ll want to share their find with everyone they know.
- You’ll Uncover Important Market Research
When you understand a demographic’s specific purchasing behavior, you’ll uncover invaluable research data that you can use for further marketing campaigns. When you’re looking to develop a marketing strategy to present products and services into the market, you need to know what triggers buying behaviors.
The key to success is understanding your target audience and what prompts them to spend money.
Within the constructs of an award system, you’re automatically conducting a default research model that provides you with this information about your customers and prospects. Through simple trial and error, you’ll begin to understand what incentivizes customers to buy. You’ll also quickly see what incentives don’t hit the mark.
This process will teach you how to focus on the specific awards offers that customers appreciate most, and help you better understand your customers when launching additional marketing campaigns.
- You’ll Have Happy Customers
By putting an effective award system into place, you’re sending a strong message to your customer base that you’re not only interested in turning a profit off of their purchases. You’re showing that you also want to forge a long-term relationship with them that benefits both of you.
This sets you apart from competitors that aren’t competing in this way, or are making a poor attempt at it.
While you may know that your offer is mostly intending to keep driving receipts into your business, your customers will look at your program as a “goodwill” act. This reflects very positively on you and your brand, and makes each customer feel appreciated and happy with each continued purchase.
- An Awards System For Employees
Happy customers are great. But if you don’t have happy employees you don’t have a small business to run. After all, you can’t do it all yourself (try as you might!)
While launching an awards system for customers, we strongly recommend launching one for your employees as well. Recognition is one of the most important parts of what makes an employee stay driven and feel a part of the team.
While sometimes small business owners think that a paycheck should be all that’s needed to keep an employee happy and motivated, the reality is that just isn’t true.
While financial incentives are definitely an option, often an award system that’s more tangible can be far more effective. This related page will give you some ideas on what awards you can offer employees that will help them feel recognized and valued within your organization.
Never make the mistake of downplaying the happiness of your employees as it directly relates to the success of your small business.
An Awards System Is a Win-Win Proposition
These are only six benefits of starting a loyalty award system in your small business. Once you begin, you’ll see that everyone involved benefits.
Don’t hesitate on awarding your customers (and employees) starting today. You (and your bottom line) will be glad you did!