For small or medium businesses, competing against the big guys can be difficult. In order to stay on top of the game, you need to find a way to bring in a flow of returning customers who are loyal to your brand. Many large companies can afford to offer discounts, stamp cards, vouchers and much more as a reward scheme in order to entice their customers into buying more. This is something smaller companies think they should consider doing as well in order to bring more people in, but are these approaches financially suitable for your business?
A Happy Customer is a Returning Customer
A loyalty programme is an approach to getting your customers excited and encouraging them to come back for more from you. It’s common sense that keeping hold of existing customer is more cost effective than bringing in new customers, so it’s only fair to reward them for their loyalty and commitment to your brand.
A returning customer tends to spend more in their transaction than a new customer would. When thinking about this, it makes sense to put a small cost for rewarding them as it is likely to pay off in terms of how much they end up spending.
Honoring your customers for their loyalty, encourages them to become your promoters. A customer who feels more valued is highly likely to suggest others use your business and in turn become brand ambassadors to the people around them. This ensures an increase in your customer base while keeping your relationships with current customers healthy and happy.
As long as you put thought and effort into your rewards scheme, your business won’t take a financial hit. It is important to make sure that you plan out your budgets and affordability before you put the scheme into place, as you don’t want to find yourself financially damaged as a result of rewarding your customers. However, you must also make sure that your loyalty scheme has something slightly unique to offer in order to beat the competitors.
A Common Misconception
For bringing in revenue, the first thought by many would be to cut the prices in order to bring the sales up, but this isn’t always a healthy approach. One downside to cutting your prices in half is that you could prevent customers from buying at full price later on.
If your customers see that you are offering your goods or service for a lower rate, they may not see the value in the service when it is full price, and may just wait for another sale. An annual sale can be something for people to get excited for, and can drive sales, but if these sales are offered too often then your product or service can lose value.
Another issue with cutting your prices is that you could be showing signs of a lack of confidence in what it is that you have to offer. When looking at it this way, you will be unable to hold onto customer loyalty and will only see a rise in customers once the sale is underway.
If you are looking to budget your business with the incentive of having a bit of pocket left to reward your customers for their loyalty, then look no further. Contact Steven Glicher today and talk to one of the experts and see how we can guide you to managing your business’s finance to the best of its ability.