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Digital Loyalty vs. Paid Membership Programs for your small business

With the popularity of Amazon Prime increasing, striving small businesses are trying to compete by running paid membership programs, which create a new type of loyalty. So what is a loyalty program and how can running a “Prime-style” loyalty program benefit your business?

memberships

There are many types of loyalty programs on the market but in a traditional sense, the basis for a loyalty program is a customer earns points for spending and redeems a reward when a point target is reached. Therefore encouraging the customer to visit more regularly or increase their spending habits.  

Historically these loyalty programs have been executed by paper or plastic cards due to ease of use.  With the increasing use of technology and smartphones, today’s version of a loyalty program can include features like points being viewed in-app or marketing messages being sent via SMS. Typically these are the types of features you should find in a good quality digital loyalty platform:

  • Point balances sent in digital format (SMS, email or push)
  • Integrated into your businesses point-of-sale
  • The ability to send marketing messages via the platform
  • Auto-promotions for customer segments

Point-based loyalty points programs work well for cafes and quick service restaurants – venues where customers generally shop at a variety of places yet you still want to be at the top of their list of choices.

membershipsDigital Loyalty has evolved very quickly due to the advancements in the way customers consume digital content. Now we look at smartphones as a digital wallet or even our own shopping mall. Online shopping, Apple Pay, Amazon’s “one-click” purchase, and Amazon Prime have all driven us to enjoy fewer clicks, less hassle and basically doing less of anything.

So where does this leave small retailers? There’s still a place for independents as there are 22 million small businesses in the US, it’s just there is more pressure for business owners to add digital to their in-store experience. The combination of consumers going wallet-less along with the popularity of Amazon Prime is what has led businesses to use a “Prime-style” loyalty platform. In essence, a customer is charged a recurring fee and the business offers special rewards or benefits in return. Some features can include:

  • Setting up memberships and recurring payments directly from your point-of-sale
  • Tracking abilities for used rewards/benefits
  • Send promotions to VIP members to make them feel valued
  • Declined cards management

The icing on the cake is that all of this drives recurring revenues and leaves little up to chance when trying to strive for growth in a business.  Membership programs work particularly well where there is a great deal of competition and the customer should be regularly purchasing your product/service.

memberships

The best vertical example using this type of software is car washes, for example charging $30/month for unlimited car washes. Membership programs can be used for unlimited rewards or a set amount of benefits within a billing period. Wine clubs, golf clubs, coffee shops, nail, tanning, hair and beauty salons, in particular, are also using membership platforms to run their Prime loyalty programs. Great membership examples in these verticals are:

  • $39.95/month for two premium bottles of wine a month
  • $119/month for 4 Deluxe facials per month and 15% off all products all of the time
  • $70/month for unlimited blow-outs or men’s shaving
  • $45/month for nail paint with shellac on toes and hands per month. As many touch-ups as required.

As far as small businesses go in surviving long-term, a digital loyalty strategy is a must – it’s just investing in an affordable product that can execute steady growth for the business and be so downright easy you would be lost without it.

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100% of customers say they want free stuff 100% of the time!

So maybe these aren’t accurate statistics but it’s a fairly good assumption to say that every customer loves freebies. The definition of a “freebie” is something given or received without charge and we’re telling you that your business should give more of them away.  These types of giveaways are important in a business’ marketing and sales strategy, but it needs to be executed effectively and with the right objective.

freebies-campaignYou might be surprised as to the insights behind giving away free goods. Logically the expectation is that customers will walk in, take their free stuff and run, but in fact the opposite occurs. Take 7-Eleven’s Free Slurpee Day for example; Slurpee sales were boosted by 38% when they offered free small Slurpees to every customer for one day of the year. Surprisingly, attendees of the Free Slurpee Day were sampling the free size and then upgrading to a larger size. Offering a freebie simulates a “try before you buy” selling technique but without any rules or obligation. This alternative method makes customers feel relaxed about making their own choices to purchase more.

freebies-campaignGreat times to offer freebies are when you are releasing a new product, when you need an aid in up-selling/cross-selling or simply looking for a new way to market your business.  Right now you are probably looking at your income and wondering how much you can afford to give away for this kind of campaigns. In reality giving away free items is a great PR stunt for large companies and they can reach far more consumers than any SMB can. So how do you run a freebie campaign without losing out?

Here’s some alternatives:

  1. Give away free smaller items with the purchase of larger items
  2. Run a contest where customers must make a purchase to enter the competition
  3. Implement a loyalty program, remembering to promote and celebrate your first day of launch in-store
  4. Market a “freebie” hour, rather than an entire day

freebies-campaignEffectively, you want either new customers coming in and becoming regulars or enticing current customers to come in and spend more with you by trying something different. Today’s consumers have a world of choice at their fingertips, so empower your customers to make the right decision by choosing you each time.

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Loyalzoo announces new “handsfree marketing” feature, set to revolutionise the way small retailers do marketing

 

London, 29 November, 2016: Loyalzoo, a leading digital loyalty service provider for SME retailers and restaurants, has taken its subscription offering to the next level by announcing a fully automated marketing engine aimed at targeting customers at the right time with the right offer.

Running alongside Loyalzoo’s easy to use proven loyalty program, the new Handsfree Marketing feature enables companies to send targeted marketing messages to customers, segmented according to their purchasing behaviour.

Using complex mathematical calculations, the system identifies specific customer-types and ensures delivery of appropriate targeted messages. Whether it is new users, high spenders, returning customers or those who have not visited for some time, the appropriate message or offer is delivered automatically, all for a low monthly cost.

The new feature takes only a minute to set up, in line with Loyalzoo’s “hassle-free” uncomplicated approach to the use of technology within independent retail environments.

According to BrightLocal and the Chamber of Commerce, SMEs on average spend $400 per month on marketing. Using Loyalzoo’s Handsfree Marketing, they could reduce these costs by up to 78 percent, while simultaneously running a digital loyalty program.

“For small businesses marketing can be time consuming, costly and sometimes just non-effective. With this in mind we wanted to invent a feature that provides a new twist on “set and forget” marketing and will revolutionise their approach” says Loyalzoo CEO, Massimo Sirolla. “Meanwhile, it allows business owners to focus on what they do best – running their business.”

Loyalzoo is already working with hundreds of merchants across the UK and US, and has been named one of the UK’s top 50 most disruptive businesses by Everline Future 50.

Since 2014, the company has made huge strides in the loyalty space thanks to its easy to use digital service. The stress-free, self service nature of the solution is its unique selling point. “Loyalzoo has been absolutely wonderful! It’s a lot less of a hassle than our previous system since the customers do not need to remember a card. It’s wonderful! It works great with our office and store, we are so happy to have found this system!” says Cynthia Monette, Owner at Avena Integrative Medical Centre of Putnam, Connecticut.

Loyalzoo recently launched a third crowdfunding campaign to support on-going growth and to establish a team in the US, working alongside its UK headquarters (www.seedrs.com/loyalzoo3).

Note for editors

About Loyalzoo – Digital loyalty card service for SME retailers and eateries

Based in west London, Loyalzoo was founded to help small/medium sized businesses compete with larger retailers and brands in an increasingly mobile/digital world. Loyalzoo is unique in the industry, as retailers of any size can setup their own, custom made in-store loyalty program in just minutes, without the need to print cards or buy expensive hardware. It also operates directly from most point-of-sale systems, avoiding any change or disruption for merchants and their staff. Loyalzoo’s service is available directly via the company’s website www.loyalzoo.com, resellers, agents, as well as via the digital marketplaces of Clover POS and Epos Now.

Rhiannon Davies
Growth & Engagement Manager
p: +44 (0)20 3598 3932  
e: rhiannon@loyalzoo.com

Wynne Evans
Wynne Evans Communications
p: +44 (0)7946 418133
e: jwynne_evans@tiscali.co.uk

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Plugging the hole in the bucket

Stopping your customers from leaking to your competitors

We’ve all had it happen to us, your business is going well with a steady flow of customers and then boom! A store opens up down the road who offers the same product or service as you but with way cheaper prices. It’s unfair isn’t it? You work so hard, and we all know that your business and staff are much better, but those pesky customers have been swayed by lower prices.  If you’re lucky your customers will have a bad experience with your competitor and come running back to you, but you’re taking a big risk.  What if they don’t come back to you, then what?  What if there was a way to stop them from ever leaving you? 

This is where the magic comes in.  Consumer psychology can sometimes be a mystery to us. Ok sure, we all know that consumers are swayed a lot of the time by cheaper prices, but what if it was much more than that.  Customers are actually heavily focused on the whole package, not just the price. Did you know 44.3% of consumers in the UK admitted that if a retailer annoyed them, they would not hesitate in using another retailer (Webloyalty, 2016).  That’s a pretty big stat! What if a staff member accidentally serves your customer the wrong coffee? Poof! and your customer could be gone down off the road, never to return.  Let’s think about it though, is that really the customer you want as a business owner? Business owners want customers that love them and vice versa. But how do you make a customer feel loved, this is the age old question. Sure you can go out of your way to remember every customer’s name and their favourite product but that’s a lot of effort (and a very good memory).  What about rewarding them for being a regular?

Customer’s come to see you sometimes every day if you’re lucky enough but what do they get in return?  The same latte in the same cup, served by the same person with the same smile. 55.4% of consumers in the UK admitted that they often get bored of using the same stores and brands (Webloyalty, 2016). Well what if once in awhile the customer gets a free muffin with their coffee, or a 10% discount on their next purchase, that might make a difference.  Loyalty cards have been around for a long time, to make this possible and to make customers feel loved. Are cards the right solution though? They always end up getting lost somehow and then the customer just ends up accumulating a stack of cards that eventually ends up in the bin because they don’t fit in the customer’s wallet. Guess what, loyalty programs are now on the rise in a digital format. “Yippee!!” I hear you say, those faithful customers are now going to love you even more. Squash those competitors and start benefitting from moving to digital. You’ll wish you had changed sooner.

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Regulars vs. Customers – Infographic

regulars vs customers

regulars vs customers

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