Why Loyalty Marketing Helps Operations Succeed

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From the beginning, loyalty rewards programs have embodied a do-it-yourself ethos. Business owners, looking to boost repeat traffic, would pour over their sales numbers to see which products or services were both popular and profitable enough to offer as free incentives. Then, it was off to the local print shop to get punch-cards printed and ready to hand out to customers. 

It’s a strategy that has proven effective, as evident by the fact that many small- and medium-sized businesses (SMBs) still take this low-tech punch card approach, and it’s this do-it-yourself ethos that remains at the heart of the next generation of digital loyalty programs. The only difference is that digital loyalty programs—the best ones, at least—provide opportunities for even bigger returns while cutting the time and costs associated with the low-tech approach.

A fantastic case-in-point is how Susan Montero, a junior high school teacher in Coral Springs, Florida, incorporates a digital loyalty program into her classroom. It’s not the typical use-case of how one might expect a loyalty rewards program to be used, but at the root level, Montero faces the very same challenge business owners everywhere do: how to motivate a target audience to show up and complete a targeted action. It just so happens Montero’s target audience is students rather than consumers, and the desired targeted action is turning in classwork rather than making a purchase.

Because of the flexibility in the digital loyalty program, Montero is able to easily implement her rewards program to her specific needs, starting with the custom rewards creation and implementation. With her custom loyalty program, students earn loyalty points by showing up to class on time and turning in classwork on or before the due date.

Students can then redeem those loyalty points for rewards, which Montero created with a tiered approach. For five loyalty points, students can get a pencil or eraser. For 10 points, they can earn the privilege of listening to music or getting a free snack. And for the students who save up their points, they can earn homework passes and extra-credit passes for 20 and 30 points, respectively.

The results of Montero’s program are extraordinary. Absences have decreased by 50 percent, tardies have decreased by 37 percent, and perhaps more importantly, the quality of work students turn in is better, a true testament to the loyalty Montero has built with her students. As she put it,

Students simply complete work with more determination when promised loyalty rewards.

Susan Montero

What Montero’s use-case (and success) illustrates is just how effective digital loyalty programs can be while giving users the flexibility they need to customize it to their needs, right out of the box. It’s the same recipe for success that can be used for SMBs, to take advantage of their unique product offerings and customer base, which is sure to have its own nuances and quirks.

Specifically, a digital loyalty program allows SMBs to:

  • Create custom rewards in-line with their brand and product offerings
  • Give their customers multiple ways to earn loyalty points, whether it’s by number of visits, dollars spent, or even sharing the business’s social media posts
  • Streamline the check-in and redemption process by using a loyalty tablet or integrated POS device
  • Implement targeted campaigns to specific segments of customers, such as new enrollees, customers celebrating a birthday, and lapsed customers who haven’t visited in a predetermined amount of time
  • Broaden their reach by connecting with new consumers via the loyalty program’s consumer mobile app
  • See analytics on loyalty check-ins and redemptions so they can improve their program over time for maximum profitability
  • Automatically import loyalty program members into their marketing database so they can then reach out to their ever-growing customer list with targeted marketing campaigns

The loyalty programs of today’s generation are far more comprehensive and powerful than the old-school punch card method, and the results prove it, whether it’s at a junior high school or traditional SMB. For example, Pinecrest Bakery in Pinecrest, Florida, saw their loyalty revenue increase by over $67,000 in the first year of implementing their digital loyalty program. The family-owned business has now expanded to 17 locations and their digital loyalty remains a cornerstone of their business model.

Many of our customers come in for a pastry and coffee for breakfast and then come in later in the day for an afternoon pick-me-up instead of visiting another café or coffee shop. They really appreciate the added rewards for their loyalty.

Victoria Valdes, Chief Communications Officer of Pinecrest

Another great example is Baja Ice Cream in Fairfield, California, which saw their revenue jump by 300% in the first two months of implementing their program. The small business typically fell victim to seasonal declines in demand for ice cream, but with their digital loyalty program, they have been able to keep business steady and growing.

Our growth has been through the roof.

Analy Del Real, Owner of Baja Ice Cream

These types of results aren’t outliers either. They are well within the realm of possibility for SMBs everywhere. All it takes is do-it-yourself determination combined with the capabilities of the right digital loyalty program to unlock the doors to success.

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