A Loyalty Program Can Benefit Every Small Business -- Here's How

Attract and retain small business customers with punch cards and loyalty apps.

Loyalty program, rewards program

As technology continues to make all aspects of a business owner's life easier, loyalty rewards programs have become cheaper and easier to implement than ever before. A loyalty program provides a cost-effective customer retention and acquisition service that increases sales, new customers and the amount customers spend per transaction.

In fact, according to Bond Brand Loyalty's study, The Loyalty Report 2017, 66 percent of consumers adjust their spending to maximize loyalty points accumulation. Most small-business owners will tell you that a loyal customer base provides stability and continued revenue for a small business, consequently helping it expand and succeed. Implementing a loyalty or rewards program at your business can increase transaction amounts and help you build a loyal repeat-client base.

Punch Cards

Choosing the right type of program for your business depends on your budget, expectations for the program and type of business. For example, a punch-card loyalty program is inexpensive to launch, but it doesn't offer any measurable demographic or purchasing statistics. This is because it isn't digital, so it's hard to track who uses it and for what. However, if you run a small coffee or sandwich shop, for example, the minimal cost and repeat business might make punch cards your best loyalty program option.

Loyalty Apps

Many coffee shops, eateries and other independent small businesses with regular, repeat customers use app-based loyalty programs like Belly or Spendgo, which include a variety of marketing features, measurable statistics about your consumers and a host of other useful tools. For example, Spendgo includes SMS (text) and email marketing options that let you communicate with customers via text, allowing the app to double as low-level CRM (customer-relationship-management) software. Most of these apps include the customization needed to easily implement the program.


To entice customers to use your program, you'll need to offer incentives to reward continued business. Most commonly, businesses offer reward points for each dollar spent. Points work well to boost spending and encourage customers to choose your business over your competitors.

It's important to tailor your rewards system to your clientele and choose how many points you'll award per purchase. Once you've decided on how to reward points, you'll need to choose what they may be redeemed for. Businesses often allow customers to redeem points for free products — buy 10 coffees and get the next one free, for example. Alternatively, you can offer a significant discount on a purchase once a customer's points have accumulated to a certain level.

Whatever you choose, remember to make your reward incentives attainable, understandable and attractive enough to keep your customers interested in your program over other loyalty programs, because awareness of these programs is growing. According to The Loyalty Report 2017, loyalty program enrollments have increased 31 percent in the past four years. Additionally, offering occasional giveaways, contests and special deals to members of your loyalty program creates even more incentive — and engagement — among your customers.

Creating a loyalty program for your business has a low cost and can yield a high return. Whether you choose a simple punch card or an app-based program, properly implemented loyalty programs drive repeat business and raise average purchase amounts. With such a low cost to launch, a loyalty rewards program is a great way to stimulate your business that involves very little risk.