This post was contributed by POS Nation.
With significant investments of both time and resources, reaching out to new customers can be a challenge, and without the proper strategies, retaining them can be even more difficult. Fortunately, modern technology has brought solutions for large and small businesses alike. With the right data management practices, your business can establish meaningful loyalty programs that result in a reliable customer base.
Your business can collect customer data during nearly every interaction. Of course, turning this data into a loyalty program that will keep your supporters coming back requires maintaining a strong understanding of your customers’ incentives and good data management practices.
Thankfully, you likely already have some valuable data collection tools in place—your small business POS system, online payment processing tools, and your CRM or database. This guide will walk through how to make the most of these tools as your build your new loyalty program:
- Create customer records.
- Use software with automatic updates.
- Offer meaningful rewards.
- Maintain good data hygiene.
Remember that the best use of your customers’ data will depend on your business, products, and sales model. Get creative with how you can appeal to your unique customer base to encourage them to return to your business again and again. Let’s get started.
1. Create customer records.
As you get to know your customers, you’ll need a system to take notes on each interaction that can easily be retrieved the next time you interact with that specific customer. This is where customer records come in. With tools that can automatically create new customer records, you’ll be able to take note of customers’ preferences and even infer which of your deals or products might interest them in the future.
Your business’s customer management tools should help you create customer records, whether it’s a system built specifically for customer relationship management or even your POS system. As long as your software allows you to collect the following information for your customer records, it can work for your organization:
- Contact information. Make note of each customer’s name, email address, and phone number so you can message them details about your customer loyalty program. Allow customers to determine which platforms they’ll receive messages on, so you can get in touch with them through their preferred channels.
- Purchase history. Take note of what customers have bought in the past so you can alert them about upcoming deals they might be interested in. For example, if a customer purchased an item that was in limited stock the last time they visited your store, you may alert them when you get new supply in.
- Ability to assign loyalty points or awards. Loyalty programs need some sort of point or award system so you can determine when your customers will begin receiving bonuses for signing up. For example, you might create a system where they need to purchase a certain number of items first or just reward them for shopping with your store for a set number of months.
By creating customer records, you can also conduct customer profiling and determine if there are general trends or shared characteristics that can help with your future marketing efforts. If you’re able to determine who your average customer is, then you can create marketing campaigns more closely aligned with your hypothetical customer’s wants and needs.
2. Use software with automatic updates.
Customer loyalty programs should be as convenient as possible for you and your customers. Ensure that your software automatically keeps track of each interaction that affects your customers’ loyalty status and rewards. Software with automatic updates has several advantages, such as its ability to:
- Reduce data entry. Manually inputting information about your customers after each purchase or updating their loyalty rewards is not a good use of your staff’s time. When all updates are automatic, you’ll only ever need to check your system when it’s time for customers to reap their rewards.
- Easy for customers. Few customers will be interested in signing up for a program that adds more steps to the transaction process, even if they will ultimately be rewarded. Ensure all your customers need to do is provide their basic contact information to initially sign up and let your software handle it from there.
- Help remind employees. When interacting with customers, your employees have several things they need to focus on at once, and software that automatically adds accounts for your customer loyalty programs can help. For instance, a POS system can provide reminder messages for employees during a transaction to ask customers if they’re a loyalty member and help them sign up if they want to join.
Along with making your program more convenient for your customers, automatic software can make your employees’ jobs easier and allow them to focus on customer service first and avoid wrestling with technology.
This is especially important for businesses concerned about potential turnover. According to Astron Solutions’ employee loyalty guide, up to 45% of employees apply to new jobs after a bad day at work. When you have technology that works with your employees to improve their jobs, you can limit the number of bad days they’ll have and keep employee retention high.
3. Offer meaningful rewards.
Loyalty programs only inspire loyalty if they actually provide customers with meaningful benefits. Your loyalty program should be designed to encourage repeat visits in exchange for tangible rewards, whether it’s a discount or other perk. POS Nation offers a few ideas for customer loyalty programs, including:
- “Punch-card” systems. While few businesses use physical punch cards anymore, the idea behind them can still attract customers. After a certain number of purchases, customers will get their next one discounted or even free. Be sure to set the number of required purchases at a reasonable amount that balances customer needs and preferences with your bottom line.
- VIP benefits. Make your customers feel like they’re part of an exclusive club with VIP benefits. These can range from reserved seating at events to shorter lines or even higher discounts on select items.
- Partner programs. Partner programs are a new, innovative customer loyalty program that many small businesses are taking advantage of. Essentially, businesses partner with each other to create a loyalty program that applies to both businesses. Then, customers can earn rewards by shopping at the same set of businesses, driving revenue to all partners.
Whenever you launch or expand your rewards program, let your customers—especially the ones already participating in your program—know. Try using loyalty email marketing to promote your new offerings, while also building brand recognition and generating new sales leads.
4. Maintain good data hygiene.
As you collect your customers’ data, you’ll need to practice routine maintenance to avoid data hygiene problems. Data hygiene issues often occur over time as your database grows, as you update your systems, and as your data collection methods evolve. Here are a few standard maintenance practices you can perform to keep your data accurate and usable:
- Remove duplicate entries. Sometimes, your system will accidentally duplicate information, such as creating two records for the same customer. For example, a customer might create a loyalty account online, then forget about it and sign up again when making a purchase using a different email. Scan your database for any profiles with identical information and remove them as necessary to ensure all loyalty rewards are going towards the same account.
- Fill out incomplete information. It’s not uncommon to have missing information about a customer. For example, if you don’t make all of your information fields required, a customer may not add their email or phone number when they sign up for your loyalty program, limiting the ways you can get in touch with them. If you’re missing data, consider using data appends or enhancements to collect the incomplete information.
- Avoid inconsistencies. Ensure all of your data is being entered the same way. For instance, are you adding dashes between sets of digits in a phone number or requiring customers to enter it all in one uninterrupted string?
Human error often plays a role in data issues. You can invest in technology with tools for detecting data errors in real-time, as well as systems that have analytic tools that make it easy to identify data issues and correct them. In addition, there are database marketing companies that can manage these complex challenges for you.
Inspiring loyalty in your customers requires creating a positive shopping experience, learning your customers’ preferences, and offering them valuable rewards to encourage repeat purchases. Customer loyalty often relies on strong data management, so ensure your software and management practices are up to date and ready to help you grow your business.
About the Author
Spencer Hoffman, Vice President, Sales and Product at POS Nation
In his 12 years at POS Nation, Spence has climbed the sales ranks, excelling in every role he’s stepped into. His most recent role as vice president of sales includes mentorship and growth across the sales team, and a growing portfolio of satisfied customers. In 2020, Spence’s responsibilities grew to leverage his deep expertise in the retail point of sale space to continuously improve POS Nation’s small business solution as our vice president of product development. Outside of work, Spence spends time with his wife and three children who are all avid driving range connoisseurs.