Customer Rewards That Get Results
Posted December 10th, 2008 by ybo
Customers love freebies. And those freebies tend to keep people coming back to your business. That’s why a rewards program can work in your favor, whether you offer a “buy 10 sandwiches, get one free” deal, send $10-off coupons to customers after they spend a certain amount or provide a 10 percent off pre-purchase discount.
Iowa Bakery Café owner Dennis Page knows the value of implementing a customer loyalty program. Page launched a rewards program two years ago in his store, and he’s seen a significant boost in business and sales since then. “It’s brought regular customers back more often, and they’re also spending more,” Page says.
Ready to reap the benefits of a successful customer rewards program no matter what type of business you operate? Here’s how:
Spread the word.
To encourage customers to sign up, Page personally talks to them about the program, fully explaining how it works, what they can expect and how they’ll benefit from signing up. But these customers don’t just have to take Page’s word for it. If he’s discussing the program with a potential member, current members waiting in line will often step in and tout the program’s benefits. “The word of mouth we’ve gotten from this is just amazing,” Page says.
Focus on simplicity.
Maintain a simple focus to set your program apart from the competition—you don’t want to bog down customers with complicated details. When members sign up for Iowa Bakery Café’s rewards program, they receive a rewards card. Every time they eat there, they earn points. For every 100 points earned, the customer receives a $5 coupon. And membership alone yields deals: A $6 coupon for birthdays and anniversaries as well as a $3 coupon for half-birthdays and half-anniversaries—and that’s in addition to other offers.
Monitor your return on investment.
“You need to examine your program and see what price points you’re working with so that you are still making money,” Page says. It’s a lesson he learned firsthand: The Loyalty Rewards program he signed up for through Restaurant Management Systems is primarily designed for sit-down, dinner club-type restaurants. So while the $15 coupons he originally sent out for members’ birthdays and anniversaries would have been reasonable for a $60 dinner, they were not financially advantageous for a business that sells bagels, pastries and sandwiches. “I was giving away too much,” he says. After six months, Page scaled down his promotions to the current $6 coupons for birthdays and anniversaries. “Customers are still really happy,” he says. Once he figured out pricing logistics, sales soared for the first time in the 12 years he’s owned Iowa Bakery Café: Between April 2007 and March 2008, the business saw a $98,000 increase in sales.
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