Kabbage Blog

Looking for more resources? The Kabbage Greenhouse brings together all the best advice, trends and information for small businesses.

Looking for more business resources? Check out the Kabbage Greenhouse.

Check it out
Visit Us

Customer Marketing, Marketing

How to Build a Killer Customer Loyalty Program for Your Business [WEBINAR RECAP]

how to build a killer customer loyalty program for your business

Thanks to everyone who was able to attend our webinar this morning on How to Build a Killer Customer Loyalty Program for Your Business. If you missed the webinar, you can view the video playback on our Kabbage Kam Webinars YouTube Channel and view the slides on our SlideShare. Both the slides and video are also embedded at the bottom of this blog post.

The concept of a customer loyalty program is simple – your customers are rewarded for repeating their business, and your business revenue increases from their support. Most big brands from Starbucks to Safeway, Walgreens and Best Buy feature customer loyalty programs. But customer loyalty isn’t just for big business – it’s a key strategy for small business owners to scale revenue and build lasting relationships with the people who matter most – loyal fans of your business and product. We created this webinar to give business owners like yourself a foundation to follow when creating a customer loyalty program, which will in turn help your business grow.

To kick the webinar off, Kabbage’s Head of Customer Marketing, Jon Parise, covered the ‘who, what and why’ of customer loyalty programs. Jon asked our attendees to think about a couple businesses they were loyal to, and why. He then asked them to consider – why would your customers be loyal to your business?

It’s important to start out with some of these foundational questions before diving in to creating a customer loyalty program because the average American belongs to 22 loyalty programs and are only active in nine, so you want to make sure you’re creating a loyalty program that provides value. (TWEET THAT) When creating your loyalty program, you want to make sure it provides the following for your customers:

  • Value beyond the purchase
  • Hard benefits that save money
  • Soft benefits that make the customer experience even better
  • Increased recognition, appreciation and validation

For your business, you want to make sure it provides the following:

  • Enables opt-in marketing by collecting their email addresses, and activates your customers
  • Leverages data to inform key business decisions
  • Provides clear path to customer and drives behavior

When creating a loyalty program, Jon also made the point that you’ll want to be sure to evaluate the following three key areas:

  • STRUCTURE: Does it bring value to your customers? Does it go beyond transactions? Does it elevate the customer experience?
  • DELIVERY: Is it easy for customers to participate? Does it enhance what you do already? Is it flexible and allows for growth and scale?
  • ECONOMICS: Is it measurable? Does it drive incremental revenue and return on your investment? (ROI)

Next up on the webinar we welcomed Heather Harmon, Public Relations Manager at Manta, to cover a few of the stories they’ve heard from their small business customers. Manta is an online business directory that provides their customers with a mobile optimized page for their business. Their community currently exists of more than 1 million small business owners in the U.S. They recently surveyed 1,000 of these business owners to ask them what their successful customer loyalty programs look like, and shared some of these stories with our webinar attendees.

The first customer they highlighted was Richard Foote, the CEO of The Oregon Crepe Company. Richard uses a digital customer loyalty program through his mobile payments product, Square. Square allows their users to offer digital loyalty through their app and point of sale system.

As part of the loyalty program at The Oregon Crepe Company, Richard’s customers earn $5 after 10 times of spending $10 or more. It’s low cost for Richard’s business, but it’s great for his customers to feel like they’re getting rewarded by coming back and repeating business at his company. Heather also shared that Richard said going digital with new mobile loyalty technologys allows Richard to keep his loyalty program quick, easy, inexpensive, successful and integrated with other technology his business already uses.

 

Because it costs more to gain new customers than retain existing customers, we felt it was important to implement a customer rewards program to make our existing customers feel appreciated.” – Richard Foote, CEO, Oregon Crepe Company

 

The next business owner that Heather featured was Ronnie Taylor who owns Ronnie T’s Spalon (not a typo – isn’t that a clever name for a spa and salon? The Kabbage team loves it!) Ronnie offers her customer a point for every $1 they spend. These points can be redeemed for services, products or gift cards.

So, the rewards she offers through her loyalty program puts money back into her business, which is great return on her investment and drives cyclical sales. Ronnie keeps track of these points using a digital tracking system within her POS, so she tracks it herself and doesn’t make customers use cards or an loyalty app that they might lose, forget or not adopt.

 

The customer rewards program at our salon is designed to both create and reward a loyal customer base, and it’s working!” – Ronnie Taylor, Ronnie T’s Spalon

 

Starting a new customer loyalty program was Doug Sleeth’s number one priority last year for his business. Doug owns Viralprint International Wholesale in Georgia, and his main goal was to make his customers happy.

 

The digital nature of the program makes it easy for customers to spread the word about my company online and they are motivated to do so because they will earn 10% cash back rewards for every sale that they refer. As a result Viralprint.com grew 7 to 8 percent in revenue.” – Doug Sleeth, Viralprint International Wholesale, GA

 

Doug is bringing in more business by offering an incentive for his customers to spread the word about this business. He’s basically incentivizing his customers to do word-of-mouth marketing for him. As many of you know, when you own a business, sometimes word-of-mouth marketing is your biggest asset.

Finally, Kurt Danskin, owner of Office Remote Control, says that he knows his customers are really crucial to the success of his business. Kurt created a pilot customer loyalty program where he signed up his customers for one year instead of month-to-month service. As a result of signing the one year contract, you’d receive three months free. This type of loyalty program that focused on retaining customers worked really well for Kurt, and as a result Office Remote Control was able to grow their revenue by a significant amount. He then hired a Director of Marketing because he’d seen actual results of how much marketing, specifically customer marketing, means to a small business.

 

My existing customers are crucial to my business’ success, so I created a pilot customer loyalty program to reward them last year. The program opened my eyes to how much revenue an effective customer loyalty program could generate for my business.” – Kurt Danskin, Office Remote Control

 

To close the webinar, we welcomed Ivan Matkovic as our last speaker. Ivan is the CEO & Founder of Spendgo. Spendgo is a digital loyalty startup that enhances the entire buying experience for a businesses customers by offering loyalty programs, digital receipts, email offers and SMS campaigns for its customers. Ivan shared with our webinar attendees the importance of using mobile correctly for your loyalty program and how popular mobile use is now – 48% of people open their email on mobile, 30% of people opt-in to SMS (texting) campaigns, and 78% of Facebook users are accessing Facebook from their mobile phones. It’s important to know that your customers are visiting and seeing your business via their mobile phone, so you need to optimize for this!

Ivan shared Spendgo’s ‘Mobile Playbook’ that they use with their customers when setting up a new customer loyalty program. This is:

  • Responsive Website: Make sure you have a responsive website. This is a fairly new concept, but what it means is that one website works across many different devices (iPhone, iPad, computer, etc).
  • SMS/MMS: Focus on setting up text campaigns that you can use to drive more business that include MMS (include images of your food, clothing product or more) that you can send to your customers.
  • Social Media Content: Really great social media content for Facebook, Twitter and Pinterest is important, and there’s an opportunity to optimize your loyalty program on these platforms.
  • Mobile Email Design: With more and more people checking their email in the morning, this is an opportunity to create content in your emails that are focused in mobile device design. You should focus on a lot less content, a great design, and get across your point quickly.
  • Less is More: Start with a small program and build up your customer base. Don’t get bogged down with all the different apps and technology that are offered.

Ivan wanted to also stress that customer loyalty is NOT always about the app. Yes, we see Dunkin Donuts and Starbucks using loyalty apps, but this isn’t always the answer for small businesses. Ivan encourages business owners to think about all the different ways you could offer loyalty, and to make sure that each of these touch points are correctly branded to highlight your business. You can create loyalty through payments (similiar to the Square example listed earlier), through online ordering (offering ordering ahead, if you’re a restaurant), and at the POS (tracking their spend dollars or total visits). You can also work on loyalty messaging and offers through social media, email and text messaging.

Finally, Ivan wanted to share that it’s most important to track your loyalty program. We know running a business can be really stressful and leaves you with minimal time, but you want to make sure that the entire customer loyalty program is tracked for its effectiveness so you can tweak, ramp up, or cancel if that makes sense for you. Track how the loyalty program is working with your employees and locations, across different loyalty campaigns that you launch, and compare all of your results.

There’s a lot that goes into creating a customer loyalty program, but you don’t have to be alone! Kabbage is here to help you with the details you need to launch a killer program that will help you grow. Did we miss answering something that you were looking for in this webinar? Let us know in the comments, or on Twitter: @KabbageInc. And sign-up for our free small business newsletter to get access to more webinars and marketing tips by entering your email in the form a the top of the sidebar of this blog. You can also contact our partners on Twitter: @Manta and @Spendgo.

Thanks for listening in! We hope to see you next time!

SLIDESHARE:

YOUTUBE: