Why Your Small Business Needs Customer Loyalty Program ?

Customer loyalty program easymarketinga2z
Small Businesses definitely need Customer Loyalty program, why?! Well before answering that, let’s consider another question, “Do loyalty Programs work ?”. Pretty reasonable question, right?! I mean why do something when you aren't sure about its benefits to your business ?

Now my answer would be, Yes! absolutely, it works!!

Well consider the following facts
1.      According to a study 45% of all customers spend more in stores that have customer loyalty programs (1).

2.      According to another study 82% customers globally indicated that they are more likely to buy from businesses who offer a loyalty program (2).

3.      And according to yet another study 5% increase in customers loyalty results in 25-100% increase in profit (3).

So who doesn’t want their customers to spend more ? And why not use CLP (Customers Loyalty Program) when a huge percentage of global customers want it, more likely to do dealings with businesses who offer CLP. And again why not use it when a little increase in customers loyalty will result in 25-100% increase in profit. These are undoubtedly huge benefits that any small business would want to have, right ?!

Now let’s answer “why small businesses needs loyalty program ?”

114 Each Hour

Each year over one million businesses starts in USA alone that exclude online start-ups, that is around 114 Bricks & Mortars every hour. That means many thing like increase in competition every hour as most small-medium businesses are imitative than innovative (Me-Too's), that means shrinking market share, shrinking profits, shrinking sales, your customers having couple of dozen new options every hour.

Why couple of dozen new options  ? Like I said most small businesses are imitative or Me Too’s than innovative, how do I know that, well out of those one million around 134,139 patents are issued roughly to the same number of businesses (that also include online start-ups) while the rest of the businesses are essentially “Me-Too’s (product/service)”  numbering around 866,000 businesses (4).

Now to compete, to attract and retain customers in such situation is really tough rather almost impossible (and perhaps for that reason most people avoid starting a small business). And in such situation you as a small business have limited number of options to survive and each and every option out of those options happens to be beyond the boundaries of feasibility for most small businesses esp new start-ups.

Now that doesn’t mean that since these options are affordable by already developed, flourished, medium size businesses therefore the owners of those businesses should stop reading this post!

Bear with me, you will like what you read further! ;p

So what are those options …?!


Innovation works, it can deliver tremendously and effectively. And that’s why Apple Inc became $600 billion (2007) company from $2 billion company (1997) thanks to its iphone, ipad, ipod etc.

Likewise consider Tesla automobiles that worth around $17 billion company after selling just around 5000 units that is really a great feat when compared to General Motors that worth around $52 billion and that has sold far greater number of units.

So yeah innovation can deliver!

But as I mentioned in the beginning that around 130k patents are issued every year, do you know what percentage of those patents delivers ? 0.1%, Yes! You heard it right around 0.1% of those patents are profitable (5). And that’s why majority of small medium businesses are imitative than innovative!

That means let’s forget about “innovation” and move to the other option, still if you want to innovate, well read this article it will definitely help you to make something that your target customers would love to buy, Customers & Open Innovation Model for Product/Service Development.


Branding is another option to compete, to differentiate when there is no difference, when you are one among million Me-Too’s but again beyond logo and getting into real branding the price tag starts from $20k to $2million (6) and yeah most new start-ups and even old ones can’t afford it.

And like I said even if you can, well you need to read this post ;p, because what you will read would definitely save and earn you good amount of money.

Branding is easy, it cost you nothing when you know what you are doing, read this post if you want to brand your business yourself or you just want to learn how to brand, Branding Strategy : When & How to Brand Effectively.

Now if you don’t know how to do it and can’t afford it either (even if you can) let’s move to our other option.


Unique selling proposition (7), it works, it helps you to differentiate your business from the rest, it helps you attract and retain customers but again do you know how to do it on your own or can you afford all that qualitative, quantitative research with complex statistics, numbers, figures, surveys, interviews, the old guns would say, Yes! (why don’t you guys just let me finish! ;p), they can afford but most new start-ups and even most of the old businesses can’t!

Yeah I know people talk about how to do the USP even I can tell you how to do it, but you won’t be able to do it unless you know what you are doing, here give it a shot!

Unique selling proposition, in simple words
1. Giving better than others (competitors)
2. Giving what (customers) they want

How ?!
Step 1
Research your target market in terms of what they want, prefer, like, buy when it comes to your product/service or to similar product/service. Likewise assess your competitors (SWOT analysis) like for instance what makes your competitors offer (Product/Service) better than yours.
Step 2
Associate/alter your product/service according to those preferences/likes of your target market. Likewise alter, improve, redesign your product/service in terms of its features, attributes etc to overcome your competitors.
Step 3
Then promote your product/service through all available/feasible touch points (online, social media, mass media, outlets, PR etc) with focus on customers preferences, likes etc and competitors, that’s it, if carried out effectively you will soon be on top in terms of quality, customer likes, preferences in your niche.

So if you can’t do the above stuff or you can’t afford then let’s move to our final option and I bet you would be able to that with little or no effort!

Customer Loyalty Program (CLP)

I believe CLP is the only feasible option for new small business owners who can’t afford Innovation, branding, USP or don’t know how to do either of these three. CLP works (already mentioned in the begining), it helps you to compete, to differentiate, to attract and retain customers, to earn massively (Pareto Principle that 80% of your profit comes from 20% of your loyal customers). 

And along with these benefits CLP also results in customers buzz, word of mouth, advocacy, referrals so on and so forth.

And CLP is way too easy to implement, now who won’t like to have all these benefits after all these facts?!!

Okay! Let's learn how to do it!

Start With A CLP Card

Yes you can start with a card, most businesses start with CLP card, where they set either points or amount in money that a customers earn with each purchase and after certain points or amount earned they have number of things to choose from like discounts, special privileges/ non monetary benefits, memberships, free products/services so on and so forth.

Now let me give you a simple CLP card template, you can work on it, add things to as per your business, as per your target market, product/service.

Though I would recommend to conduct a thorough target market research (qualitative only) before considering anything in the card, this will help you to develop a CLP that your customers would appreciate and something that your business would be able to afford, to deliver, to sustain in the longer run.

Now let’s get to the card template!

Customer Loyalty Program Card Template

This template can help you in starting your first CLP, you can add/remove things in it as per your business feasibility, target market, nature of your product/service. Keep on experimenting and you will know what drives your target market to your business, what keeps them coming back.

And on basis of that knowledge you can further make many other CLP cards based on specific target market segment thus offering each segment a CLP of their preference and that means retaining your customers, keeping them loyal along with healthy profits.

So what are you waiting for, don’t waste a minute you know 114 per hour ?!! Don’t you!

That’s it, speak your mind, share your ideas, how can this approach be further enhanced to improve customer loyalty, what else would work in CLP card, why and why not! Comment box is just under.

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1.      John Burtzloff, “Keep Customers Coming Back For More,” Entrepreneur, June 10, 2002, http://www.entrepreneur.com/article/52780
2.      http://www.nielsen.com/us/en/newswire/2013/free-and-easy-loyalty-program-benefits-that-matter-most-globally.html
3.      Reichheld, Frederick F. The Loyalty Effect, Harvard Business School Press, 1996. (Revised 2001)
4.      http://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_all.htm
5.      Tomina Edmark, “On Your Mark…” Entrepreneur.com http://www.entrepreneur.com/article/17564-5
6.      http://distility.com/marketing-agencies/what-should-you-pay-for-branding/  
7.   Reeves, Rosser (1961). Reality in Advertising. Macgibbon and Kee. pp. 46–48.

About Publisher Arshad Amin

Certified SEO Professional, Small Business, Start-up, Marketing Expert with ton's of practical, actionable ideas, insights to share, Proud Founder and Owner of www.easymarketinga2z.com and www.topexpertsa2z.com

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