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6 Reasons To Add a Customer Loyalty Program to Your Business

If you’ve already established your business, it’s urgent that you add a customer loyalty program for the six reasons we’ve outlined within this blog. No matter what that business is — one of your primary goals is probably to increase your clientele. But while strategizing on how to gain new customers is a fine objective, it is costlier — and perhaps more difficult — than trying to keep the ones you already have. The good news is that an increase in revenue doesn’t necessarily require welcoming fresh faces into your shop. Keep reading to discover why learning how to start a customer loyalty program can go a long way toward retaining your customer base.

What Is a Customer Loyalty Program?

A customer loyalty program is a vehicle you can leverage to keep your regular customers continuing to do business with you, whether you’re a large corporation or a small-to-medium size business (SMB). After all, “61% of SMBs” report that more than half of their revenue comes from repeat customers,” according to Socket Labs. So it only makes sense to target current customers with a loyalty program that encourages future sales, whether you’re running a brick-and-mortar boutique or an online store.

Types of Customer Loyalty Programs

As you learn how to start a customer loyalty program, you’ll discover that there are many types. Three of the most common are:

Points Programs: This program rewards customers with points depending on how much they spend. You determine how many points to give per dollar spent and what the reward will be. Customers might redeem their points for money towards future purchases or perhaps a free item. It’s up to you.

Spend Programs: This is similar to a points program in that it counts what customers are spending, but it doesn’t reward points. And the reward is typically only a credit or gift card that customers can spend on future purchases.

Customer Loyalty Cards: Many retailers offer their customers loyalty cards because they are so effective. These cards generally let the cardholders take advantage of discounts and other promotions not offered to those who don’t have them.

In addition to the above, there are tiered programs, cashback programs, threshold programs, and punch cards — to name a few. Your options are downright plentiful. You may even think of new and innovative ways to create your own reward system that lets your customers know how much you value them.

6 Reasons You Should Learn How to Start a Customer Loyalty Program

1. Implementing a Loyalty Program Is Cheaper Than Acquiring New Customers

It is cheaper to implement a customer loyalty program than it is to try and gain new customers. According to Invesp, “it costs five times as much to attract a new customer than to keep an existing one”. Therefore, you should concentrate on getting customers back in the door instead of focusing all your efforts on attracting those who have yet to set foot in it.

2. Loyalty Programs Can Increase Customer Spend

What better way to go after more dollars per customer than to offer perks and other incentives for doing business with you? This encourages people to spend more in your store as they strive to reach the points or spend levels they need to achieve their next great reward.

3. Loyalty Programs Improve the Customer Experience

As reported by Forbes, “84% of companies that work to improve their customer experience report an increase in their revenue”. Loyalty programs offer an incentive to customers, which, in turn, improves their experience when they visit your store or online site. When a person receives an extra “something” just for buying what they would have anyway, they feel valued by the merchant or service provider. This makes them much more likely to frequent your establishment than to abandon it for a competitor.

4. Loyalty Programs Bring in Additional Customers Through Word of Mouth

Another good reason to learn how to start a customer loyalty program, this one also takes care of that desire to bring new customers into your fold. People talk and they talk even more when their user experience is especially good. You kill two birds with one stone when your repeat customers (who feel so valued) share fantastic experiences with their friends, family members and (hopefully) everyone else they know. This can drive a lot of extra revenue for your business.

5. A Customer Loyalty Program Is a Great Way to Promote Your Brand on Social Media

You can reward people who share your posts on social media by offering them a discount code to use when they purchase your product or something else that may interest them — perhaps literature on creative ways to use the product they would never think of? Whatever it may be, advertising your customer loyalty program incentive on social media can help you grow your brand’s reach exponentially.

6. You Can Gain Valuable Customer Insights

Since you’ll be collecting data to track how much money people are spending, you’ll also be able to gain valuable insights into your customer base. You’ll be able to monitor customer behavior to determine who’s buying more, how often they visit your store, what product is moving and all sorts of other information that will let you make smarter business decisions down the road.


There are plenty of good reasons for knowing how to start a customer loyalty program. Whether you’re interested in implementing loyalty cards or prefer to use a points-based system, you are sure to reap myriad benefits. Reward your customers for doing business with you and you’ll be rewarded back tenfold.

About LOLA POS —

LOLA POS is a merchant advocacy group dedicated to reducing or eliminating the unnecessary fees associated with accepting credit card payments. Since 2004, LOLA POS’s payment processing solutions have been delivering tailored solutions, best-in-class customer service and high-quality service offerings for businesses across multiple industries.Whether it’s high-risk or low-risk, brick-and-mortar or e-commerce, LOLA POS will create the best processing experience for your company. For more information, visit us at www.lolapos.com or call (866) 509-7199.

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