That’s a great idea! So where do you start?
First off, you need to gauge the type of business you are running and see if it makes sense. You may want to ask yourself the following questions:
- How frequently do your customers buy from you? Weekly? Annually?
e.g. If you sell tea products, how long does it take for them to consume the tea before they return to buy more?
- If you offered an incentive, would your customers come back more often or purchase more?
e.g. If you are an automotive mechanic, would a rewards program entice them to get more work done to their vehicle?
- With a rewards program, what are the chances that your customers will want to tell their friends about your business?
e.g. If you provide stock investment advice, what’s the likelihood that they will want to share your valuable information with their acquaintances?
- How much of an incentive can you provide that will still allow you to make a comfortable profit?
e.g. If you run a grocery store, is it better to give away SWAG as opposed to discounting your already low-margin products?
- Should you be offering a rewards program to all customers, or just your best customers?
e.g. If you sell sports supplements, would you extend discounts to only your loyal fitness fanatics, or one-time buyers as well?
- Are your competitors offering a rewards program? How successful do you think they are with them?
e.g. Would it be feasible to duplicate what your competitor is doing, or do you need a different tactic?
If you feel that your business is suitable for a Rewards Program, you’ll then need to flush out what the program will look like and how it will function. Whether it’s custom membership cards, location-based check-ins (e.g. Foursquare), etc., you need to ensure that all your staff are familiar with how to operate.
Next big step is to get the word out. Through email blasts, website, social media, word-of-mouth, print advertising, in-store signage – there needs to be a multi-pronged approach to let people know that this program is being launched.
Most importantly, there needs to be a system for tracking the uptake for the Rewards Program. Customers need to opt in with their contact information, their profile to be entered into a database. Each time a customer wishes to take advantage of the program must be recorded. Activity should be analyzed on a monthly basis to measure the success rate of the program.
Inc.com offers another inciteful article on how to successfully implement a Rewards Program for your business. Worth checking out!