One of the best ways to grow your startup business it to create a loyalty program. Rewards programs remain one of the most efficient methods for startups to reward existing customers and keep them coming back.
This is especially important since gaining a new customer costs between 5 and 25 times more than keeping an existing one, according to Frederick Reichheld of Bain & Company, further highlighting why marketing dollars are best spent on nurturing current relationships with known customers.
Loyalty programs have come a long way since the days of copper tokens, box tops and punch cards. But how do you start a loyalty program today that does more than simply offer to mark a punch card each time a customer does business with you?
Here are five easy steps to get you started:
Step 1: Decide what reward to give
First, decide what reward you want to offer and for what. Err on the side of making the reward too small rather than too big.
Use ongoing rewards that save customers money, as research shows that 57 percent of customers sign up for a program to save money. If you reward customers frequently, they will be more likely to use the loyalty program you provide—even if you offer smaller rewards as a result.
Cash back often works well for the same reason that gift cards are so popular.