If you're on a tight budget, here're 8 ways to launch a loyalty program.
Loyalty Strategy

8 Tips to Launch a Loyalty Program on a Tight Budget

Photo by Markus Spiske on Unsplash

Consumers are enrolled in an average of 14.8 loyalty programs each, yet are active in less than half. The reason is not the size of program or its investment, but how each program dollar is spent. Today there are a lot of affordable ways to actively compete, even for small companies. Here are eight.

Size Doesn’t Make You Relevant. Understanding Does.

When it comes to maintaining customer connections through a loyalty program, square footage and budgets don’t matter much. Old-time shopkeepers kept a running list of their customers’ favorite products and were able to make recommendations without anything close to the tools we have today. Nearly 55% of U.S. consumers are very or extremely interested in using the reward programs of their local merchants, and 56% are interested in receiving special offers from local businesses.

By: Jenn McMillen

These post-pandemic sentiments place small businesses in a sweet spot for launching, or relaunching, loyalty initiatives.

There’s just one hitch: Some consumers aren’t sure they trust a small business with their data, in part due to limited budgets. But with so many built-in services now available, from data analytics to reward distribution, there are lots of budget-friendly ways for little guys to deliver — and prove — big-business relevance and security. 

Putting On the Big-Loyalty Pants

There’s no rule that dictates an effective loyalty platform should be expensive. A third-party digital rewards app can cost as little as $50 a month. However, small decisions that determine how each specific investment will improve engagement will make the difference. Here are eight.

1) Use an “off the shelf” technology. Rather than try to build a tech platform from scratch, shop around for loyalty tech vendors that specialize in strategies for small and/or niche organizations. Many POS systems have integrated loyalty components, making it seamless to offer a loyalty program. (More on that below.) The quality and diversity of these vendors is improving with the number of loyalty initiatives, so it takes a little homework to find the right fit. But there are shortcuts, such as searching online for vendors that not only build but fix loyalty platforms. This indicates flexibility.

2) That said, be fussy about third-party tech platforms. The right technology partner will ask pointed questions to understand your goals, establish the necessary metrics and then build a competency strategy that meets those needs. Offerings can include quantitative and qualitative research, data analytics, technology sourcing, program management and marketing — but it shouldn’t have to involve all of these services. If a vendor pushes to sell a product or technology you can’t justify, move on.

3) Let the marketing direct the technology. It’s tempting to become enamored with whiz-bang technologies and let them guide marketing decisions. Resist! Technology is a tool, not an objective. In the case of loyalty, the tool should narrow the company’s focus expressly on its predetermined goals (so establish those first). The loyalty operator’s job is to identify and deploy the right technology to meet those goals.

4) Take a point from powerful POS systems. Built-in loyalty POS systems, such as Aloha POS, Paytronix and Square, provide a range of end-to-end services from digital ordering to analytics, guest interaction to back-office tools — even artificial intelligence to maximize data (Paytronix). Some of these systems arrive at the door with built-in loyalty capabilities; others will integrate with a third-party loyalty app.

5) Make advertising a social endeavor. A must-join loyalty program sells itself by word of mouth, and social media and online communities are made-to-order outlets. Small businesses can target specific markets — demographically and geographically —with results as good or better than paid advertising. One way to maximize social marketing bang: Recruit best customers as micro-influencers — people whose followings are larger than the average person’s, but not as big as a celebrity’s.

6) Use company values as a rewards currency. Nearly 70% of consumers prefer to buy from companies that align with their values. By extension, this applies to loyalty programs that enable members to play an active role in causes, such as the environment, ethical work practices, and helping the disadvantaged. Donating an item for each product a member buys (Tod’s), giving a percentage of sales to a local food bank (Target), or planting a tree in a member’s name (Amaranthine beauty) — these are rewards you can’t put a price on.

7) Imagine: more affordable creativity. A loyalty program’s design is never an afterthought. Those images, the type face, the degree to which words contrast against backdrop colors — these details play a crucial role in the first moments a member opens a push email or visits a loyalty app. And those words should count, grabbing the viewer by the collar within seconds, because that’s all the program has. 

8) Practice touching your toes — even backwards. Goals may change based on consumer reactions to the loyalty program, so a company should have its budgeted “go” kit ready to affordably flex its operations. If hiring a third-party provider, look for one that has a track record of being nimble and accommodating. If, for example, a small business already has a butt-kicking strategy, it may just need a vendor to execute it.

Loyalty Knows No Size

Lastly, small businesses should keep in mind that a loyalty program is not the end of a strategy nor a set-and-forget service. It requires ongoing care and feeding to stay fresh and keep members engaged.

A loyalty program is the means to a more profitable, fertile business philosophy built on customer collaboration. Members will spend more time and money with the brands they trust, that listen and that make them feel good for their engagement.

When a loyalty program does that, it gets Fortune 500 results.

Jenn McMillen is Founder and Chief Accelerant of Incendio, a firm specializing in customer-facing initiatives, whether it’s marketing or technology. Incendio builds and fixes marketing, consumer engagement, loyalty and CRM programs, providing a big-agency approach to marketing needs without the big-agency cost structure, and is a trusted partner of some of the biggest U.S. brands.

8 Tips to Launch a Loyalty Program on a Tight Budget
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