"It's $10 per item, but we'll waive $2 for returning clients or those who have a store wallet."

You may have heard this sales strategy at some point by now. Or better yet, maybe you've taken advantage of this offer too.

You see, customer loyalty programs are all about retaining buyers through special discounts that offer rewards for repeat purchases. But how do you go about designing and running an effective customer loyalty program? Read on to learn more.

How to Design a Customer Loyalty Program for Small Businesses

Here's a step-by-step rundown of designing a customer loyalty program for small businesses.

Step 1: Choose a Remarkable Name

You have to choose a name that incites interest and curiosity in customers. While it should clearly state that customers will get a discount for participating, it must invoke excitement in the participants.

Here are some of my top favorite names:

  • The North Face VIPeak
  • Sephora's VIB Rouge
  • Workout Empire's Sassy Army
  • Go Far Rewards by Wells Fargo
  • Diamanti Per Tutti Diamond Club

Step 2: Select Your Rewards Carefully to Show Appreciation

Customer loyalty programs can be expensive for small businesses. Therefore, it's better to get it right the first time. That is why you should make your loyalty program diverse by offering different kinds of rewards.

You can reward customers who actually buy products from the stores in a specific way without leaving behind those who follow your brand on social media. Plus, if you offer valuable rewards, you'll attract more sales. On the other hand, if you don't offer valuable rewards, people won't care whether they accumulate the points or not.

Remember: A customer who retweets your poster may bring in more sales than you can ever imagine. So make sure you reward them appropriately even if they haven't bought anything. A 10% discount on the starting price of a certain popular product is a good start.

Step 3: Make Sure the Reward Points are Easy to Accumulate and Redeem

Making the program worthwhile for the customer means offering valuable points that are easy to accumulate. Your average shopper shouldn't necessarily need to purchase products for an entire year to be able to redeem the points.

You can offer a customer loyalty card with a redeemable limit (say after 100 points). This may even encourage them to shop more! Custom coupons and discount codes can be used in loyalty programs, and even in retargeting campaigns to improve retention.

Step 4: Give the Program a Deeper Meaning

Let's face it: People know many customer loyalty programs out there are just ploys by retailers to get people to spend more. This assumption is frequently true given that most discount programs lead to impulse buying.

Giving a program a deeper meaning increases the level of trust that customers have in the products or services you offer. As a professional, you're tasked with the difficult task of showing the customers that you want to offer rewards to show appreciation and not to maximize sales — that's just an additional benefit. That is where optimized content will come into play. The program shouldn't have any distractions or frills since most people will notice such red flags.

Even your competitors should be worried about the popularity of the program once you launch it. If they don't care, your customers probably won't either.

Step 5: Add Multiple Enrollment Points for Your Customers

Your customer will appreciate getting several enrollment options to participate in the program. For example, if you sell both online and offline, there's no reason why you shouldn't have a customer loyalty program covering both areas.

Doing this will give your business a sense of consistency while keeping the shopping experience uniform across the different platforms.

You can also take advantage of the tools built into each domain. An online catalog, for instance, can benefit from indicators that show how many points the customer will accumulate with each purchase. Similarly, ecommerce paired with email marketing can be a great way to entice customers to further engage with the brand and get them more involved with the loyalty program as a whole.

How to Run a Successful Customer Loyalty Program

Once you've created the program, you'll need to run it, and run it well. Here are four tips to set yourself up for success.

Create Multiple Channels

With most small businesses operating online and offline, there are multiple points at which your customers could use the program. For example, they'll expect the service to be available at the physical stores, on the website, and across social media handles. If you're hosting webinars or podcasts, don't hesitate to mention your customer loyalty program.

Your job is to ensure your customers can use several channels to get loyalty points.

Back Your Program With Excellent Services

A common mistake that business owners make is using customer loyalty programs to make up for poor products or services. Customer loyalty programs should come AFTER an excellent and satisfactory transaction.

Don't fall into that trap. Customers will see through the charade and you won't like the result.

Focus on the Customer — Not the Competitors

A customer loyalty program isn't the right tool for you to scope out the competition. Focus on rewarding your customers without necessarily worrying about the competition. This will give you a competitive edge since prioritizing your customer's requirements will allow you to deliver unmatched value to your clients. At the end of the day, great customer experience is the winning factor in any business competition.

Share the Positive Feedback From Customers

If your customer loyalty program has a positive impact on your customers' lives, let people know about it.

Keep in mind that despite how good your advertising is, a customer will trust other customers' reviews more — even if they're complete strangers. No matter how weird that sounds, it's human psychology. Make a point to capitalize on positive testimonials and use it to drive more engagement.

Don't also forget to work on the negative feedback to identify areas of weaknesses.

Final Thoughts

Creating an effective loyalty program shouldn't necessarily be a massive project. If done correctly and customized to your customer's experience, it'll reap major benefits and help you establish a long-lasting relationship.

With the above information, there's no doubt that you'll create and run a successful customer loyalty program. You got this!