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If you’re in business you know that it is easier and less expensive to keep an existing customer than bringing in a new one. There isn’t a definitive cost but most experts agree it takes between 4 and 10 times more to acquire a new customer than it does to keep the ones you already have. So it seems logical to consider thanking your loyal customers by adding a reward program to your marketing mix.
In developing reward programs you first want to analyze the cost of getting new customers (for some it might be quick with a small acquisition cost, others may take months/years and be very expensive). Having a good understanding of this cost will help you determine an appropriate budget for customer reward programs. Of course, it is important for a business to be successful that they maintain a good mix of both loyal and new customers and well developed reward programs can help with both.
Mobile Apps Keep you in Touch with Loyal Customers
Reward programs can take on many forms and technology is making it easier and more convenient to stay in touch and reward your loyal customers. One of the most popular and easy to set up for any size business is a point or punch card system.
The point system or punch card is shared with frequent customers and they accumulate points or “punches” to redeem for something of value that encourages them to come back again and again. For instance, they receive a logo’d swipe card (has the electronic stripe on the back) and each time they make purchases they swipe their card and points are added to their account. Once they reach a certain level of points they can redeem for a free item or an upgrade.
A very similar system is the punch card (many times just a business card size) with squares/circles or $ signs indicating their purchases. They get “punched” each time they make a purchase and when the card is fully “punched” they get a further discount (an additional 50% off your purchase, buy two get one free) or a free item (think car wash, sandwich, coffee, oil change, extra service item) or other special customer treatment as a thank you for their loyalty to your business.
Technology now takes the point and punch card systems to another level with apps that do much of the
same thing and more. Given that many people like to comparison shop while they are in brick & mortar stores, many larger chains are integrating mobile apps to their loyalty programs. For instance, if you are within a geo-fenced area around a store you may receive points that are credited to your account or an extra in-store incentive to get you to buy now. Another advantage some apps provide is an option to receive virtual punches for social sharing which increases your “relationship” with your customer. Think about a customer posting a picture of them using your product on Facebook, Instragram, Pinterest or Google+ and they receive a virtual punch toward their free item or discount. Since many of these apps “know” when your customers are near your store location then a notice of specials can be sent to entice them to come in and buy now. The options are almost endless and will continue to grow and enhance as technology does.
As you can see, this type of reward program can be developed with little investment (simple punch card) or taken to a larger extreme with a custom mobile app depending on your business.