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Customers are one of the biggest assets of any business. Be it a small business or a large one, a company’s ability to retain its customers and keep them engaged can make or break it. In this regard, every business needs to successfully develop a connection with its customer base and maintain this connection through different strategies.

One such strategy involves loyalty programs for small businesses and large corporations. A report by Business Wire has shown that 69% of brand executives have invested in loyalty programs over the part two years to drive customer engagement. 

While loyalty programs can be a great way to attract and retain customers, many ideas and strategies have become immensely overused. And these overused strategies have the inverse impact of repelling your customers rather than attracting them. A study by Harvard Business Review revealed that attracting new customers strategically is the top goal for products and services to increase retention rate. 

However, businesses nowadays need innovative ideas and creativity in their strategies to meet their loyalty program goals. This is even more crucial if you are a small business just beginning to make a mark in the industry. In the same study, HBR revealed that only 46% of brand executives think their loyalty strategies work and generate results as expected. 

The rest need to rethink their strategies and approach. With a creative program that differentiates you from your competitors, you can attract your customers’ attention from the get-go.

So, if you are a small business struggling to get your creative juices flowing, here are 7 ideas on loyalty programs for small businesses that can help you achieve the desired effect.

7 Loyalty programs for small businesses that work wonder

Here are 7 creative ideas for you to consider when designing your loyalty program. Depending on the industry you operate in and the kind of services you offer, you may adopt variations of these ideas to provide benefits that are sure to engage and attract your customers.

1. Award maximum points for spending

One interesting strategy you can implement is to award points based on the amount the customer has spent. This means that you can establish different tiers of points that the customer will unlock when crossing certain milestones in terms of the amount they spend.

You can set this amount per transaction or cumulatively, with the total value of purchases made till a particular time need to reach a milestone amount. Accordingly, you can provide perks by offering gifts or benefits depending on the milestones crossed. Alternatively, you can also credit customers’ accounts with points that they can redeem through their future purchases.

2. Run festival or event-based offers and programs

Festival-based and event-based promotions are common but incredibly successful strategies to keep your customers satisfied when implemented properly. While sales and promotions during festivals and events are given, you can provide special offers only to those who are a part of your loyalty programs, such as free samples or combo offers. These events can be national holidays, local and regional festivals, company anniversaries, etc.

Furthermore, you can personalize this strategy by further providing special offers and promotions to customers on their special days, such as their birthdays or anniversaries. This can lead to greater customer satisfaction and can not only help retain your customers but also compel them to buy more on their special days to enjoy their customized offer.

3. Give first-time purchase discounts

Attracting new customers is as important as retaining your old and loyal ones. So, to attract new customers to continually use your services, you can provide special first-time purchase benefits and discounts. In the case of online purchases, this can be in the form of a common and generic discount coupon upon signing up, while customers preferring in-store purchases can be provided with the benefit of providing their number and enrolling for the loyalty program.

This can also add them to the sales funnel, which will then allow you to send offer messages on every single event-based or festival-based special promotion.

4. Introduce VIP perks

VIP perks are a time-based or value-based benefit that you can provide to your loyal customers. Specifically, your loyalty program can offer exclusive benefits and offers once the customer has reached a certain number of transactions or a certain value of cumulative purchases.

You can further set a time range, such as a specific number of purchases or purchase value reached within a year to be considered a VIP as per the program. For such VIP customers, you can provide perks such as free upgrades, priority service, early access to sales, or customized gifts and hampers.

5. Sell store-exclusive freebies

Loyalty programs for small businesses don’t only need to be in the form of providing benefits. You can also provide loyalty benefits in the form of store-specific merchandise that is not available anywhere else. These merchandise pieces may include the brand logo, the name of a particular campaign that is currently going on, quotes, or any other such customized concept.

You can also make these freebies limited edition, including strategies such as only the first X number of customers getting the product, or the products being available only for a limited time, such as during a festival or event.

Furthermore, you can also combine the idea of offering VIP perks with this strategy by providing these freebies to only those who have reached a certain milestone in terms of the number of transactions or the cumulative value of purchases made within a specific time range. This will make other customers purchase more from your store so they can get those exclusive perks for themselves.

6. Host feedback rewards once a month

Feedback from customers is an effective way to enhance your services and optimize them as per what your customers want. However, most customers may not feel inclined to share their feedback as it takes time and does not provide them with any immediate benefit. In order to combat this, you can conduct incentivized feedback sessions for your loyalty program customers.

You can offer products, benefits, or discounts in exchange for detailed and honest feedback. This feedback can be in the form of in-store surveys with discount coupons awarded or surveys sent over the mail to the customers with gift cards and coupons awarded on completion.

7. Outsource with digital loyalty apps

Often, especially in the case of B2B companies, an issue may arise regarding loyalty programs for small businesses if the company’s offerings are not ideal to be offered as loyalty benefits. In such cases, you may collaborate with digital loyalty apps that help you offer personalized rewarding experiences based on who you are trying to reward.

Xoxoday Plum is one such digital loyalty rewards platform that offers AI-enabled reward automation, delivering reward experiences that your customers are sure to love.

When you use Plum, you get the option of consumer promotion offerings that your customers can themselves choose from. Moreover, you can even integrate the platform with your existing CRM and automation systems, allowing you to monitor how well the campaign is performing.

How do you know if your loyalty program is working?

Loyalty programs can be very effective in changing the very presence and image of your brand. But you can only find that out if you monitor how customers are reacting to it. So, after you have put your creative loyalty program strategy into action, you need to keep an eye on the statistics and metrics to find out whether you have been successful or not. And for this, these 3 metrics can help you out.

1. Customer retention rate

Customer retention rate is probably the easiest and most effective metric that can help you assess how effective your loyalty program has been. This is especially true since the sole aim of such programs is to retain customers. In this regard, if you see yourself investing a huge chunk of money in the program but your customers are not making repeat purchases, then you can be sure that your chosen program is not the right choice.

Conducting regular checks regarding this metric, such as monthly or quarterly, can help you implement remedial strategies promptly for the best impact.

2. Customer churn rate

Customer churn, just like customer retention, must be tracked to see how many customers have left your side. This, together with the retention rate, will help you maintain an accurate monthly track of how your consumers respond to your loyalty programs.

So, if your retention rate is decreasing while your churn rate is increasing, you can see that you need to change your strategies right away.

3. Customer satisfaction index

Lastly, you can find out directly from your customers whether your loyalty programs have been successful or not. You can gain these insights from surveys and other feedback methods, such as tracking reviews on public platforms and discussions on social media.

If you observe a high customer satisfaction index, then ideally it coincides with a high retention rate as well. However, if the customers seem satisfied but still the churn rate is high, then you may need to change your strategies accordingly as well.


In this way, loyalty programs can be a highly effective way of attracting and acquiring more customers while retaining your existing customer base through special offerings. In the case of loyalty programs for small businesses, it is important that you use creative ideas so you can present your customers with differentiated services from the get-go.

However, as important as it is to use the most appropriate loyalty program ideas, you also need to be vigilant in collecting insights and evaluating them to understand the effectiveness of your chosen programs. This can provide incredible insights into how successful the program has been as well as how your target customer base is responding to it.

Ultimately, these metrics can become crucial factors in how you move forward in terms of your loyalty programs.

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