Navigating loyalty programs as a new business

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Whether you’re in the process of starting-up, or your business is still in it’s infancy, it’s never too early to start thinking about loyalty programs. There is a wide variety of reward incentives already in use today so understanding the many examples of loyalty programs can be beneficial to your brand success.

Having loyal customers can mean the difference between success and failure. But, it’s worth noting that nearly 40% of people don’t actually buy from a brand, because of the brand itself – but because of the price of products. So, remaining competitive is the key – and a loyalty program can help you do just that.

Why is customer loyalty important?

  • Increased profits – The main reason customer loyalty is important is because they can dramatically increase your profits. It’s easier to sell a product to a previous customer, than it is converting new customers. Apple is a great example of brand loyalty. The majority of their products are sold to existing customers because they have bought into the ethos of the brand.
  • Reduced marketing costs – Customers buy products based off the feedback from others. The more loyal customers you have, the more positive feedback you’ll receive. This will then help prospective customers make an informed decision about your product or service.
  • Future proofing – Loyal customers will keep coming back regardless of competitors if they perceive your overall service as being better. This will help future-proof your business against any economic uncertainty.

Which customers should you target?

Before creating a loyalty program, it’s worth thinking about who you’ll target and creating a loyalty program that will suit them. Research suggests that Gen Y (born between 1984 – 1996) and Gen Z (born after 1997) are the most brand conscious. And it’s Millennials and Gen Z that are more inclined to buy from companies who take the personal approach to advertising, particularly user-generate content, personalized offers, and communication.

How to create a loyalty program?

Loyalty programs remain one of the most efficient methods for start-ups for retaining and gaining new customers.

  • Decide your rewards – Decide on the rewards you want to offer but be cautious. If you’re rewards are too great, it could damage your profit margin. Hoover is perhaps the most well-known for creating the worst sales promotion. And remember, it’s easier to increase rewards over time, instead of reducing them.
  • Keep it simple – If your rewards program is difficult to understand or involves complicated sign-ups customers won’t engage. Think “points mean prizes” and you can’t go wrong.
  • Does it benefit customers – Customers are turning their backs on large chains because they no longer trust them. If you’re a local business, make sure your loyalty program benefits local people and your community.

Great examples of loyalty programs

Loyalty programs have been around for decades, and the advancement in technology means you can even reward your international customers. There are thousands of examples of loyalty programs you can use as a template for your own. Whether you choose to use an app reward system like Starbucks, a tier system like the Virgin Atlantic Flying Club, or a membership program like Amazon Prime.

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Samantha Acuna is a writer based in San Francisco, CA. Her work has been featured in The Huffington Post,, and Yahoo Small Business.