If you don’t have a rewards program, you could be missing out on an easy way to gain customer loyalty. If you do have a rewards program—is it working to your business’ benefit? And are you rewarding the right behaviors?
When done right, rewards programs are a win-win for everyone. Customers receive rewards for their patronage while you and your staff see more revenue through more frequent visits or higher average visit spend.
I’ve offered tips on how to create a rewards program that encourages customer retention and rewards the right behaviors, both of which help you build a more profitable business.
Traditionally, customers had to enroll a customer which might require just a few minutes. However, given you already have your customer’s name and contact info, it’s easy for you to automatically sign them up for your rewards program. No applications, no extra minutes waiting at the front desk, and no big commitments for the customers.
In fact, you can award points starting with their first visit.
In some cases, you may want to extend loyalty points (or rewards) only to your members. In this case, ensure that every member is automatically enrolled in the rewards program on purchase of the membership.
Your customers don’t want to carry around another frequent punch card or loyalty membership card in their wallets—they probably already have plenty for their groceries, gas station, retail stores, etc.. And in many cases having to carry around a physical card is a deterrent to using the loyalty program in itself.
Going digital means that loyalty points are effortless and convenient for the customer, bringing benefits to your staff as well. The right system automatically awards points to the customer based on their behaviors, and will text/email the customer after each transaction for credits or debits to their account. For example, if you want to encourage guests to book appointments online, the system would award the right number of points when a guest books an appointment online.
Your loyalty program should reward customers for behaviors that encourage better business. So, what are the right behaviors? Consider rewarding points for the following:
Rather than awarding loyalty points that can be used in exchange for any service, you can restrict points to specific services, packages or retail. These items can help customers try services or products they might not otherwise have tried.
For example, offer an aromatherapy add-on to a massage, or a signature pedicure rather than a basic pedicure. Often, a customer simply needs to try a service or product once, which will then become a habit for future visits. .
You can also restrict rewards to gift cards, that is, once a customer accumulates enough points, she earns a gift card. The gift card can be for a dollar value or for a specific service or treatment. This can result in your customer gifting this card, in which case you acquire a new customer. Or, if they keep it for themselves still encourages their own loyalty.
The key is to be able to identify the services and retail that you should promote, and tie the rewards to those same items.
There’s no point in having a rewards program if your customers don’t know about it, or forget about it. There are few ways to keep customers informed. For example, it could be as easy as sending automated text messages (SMS’s) when they earn points are have accrued enough to redeem their points. You stay on top of their minds and they know you’re committed to helping them earn a real reward.
Another example is to run promotions, which don’t discount a service, but reward extra points, and drive extra business. Some examples –
A flat rewards program, where every customer earns the same points, is easy to understand for everyone. However, many industries use tiered loyalty programs to offer more and bigger rewards for their most loyal and high spending customers.
Salons and spas can implement a similar program, where your most valuable customers are awarded more points or perks.
With the right technology, there’s no manual effort involved in managing a tiered program.
If your program allows customers to accumulate points, you could consider expiring loyalty points. We’ve seen salons and spas do it both ways, so it comes down to your preference and of course legal restrictions in your region.
If you choose to expire points, you can send reminders to create a sense of urgency and encourage customers to come back in.
We don’t want to think about our staff or customers taking advantage of loopholes in any process. But, loyalty points are a type of currency, which opens possibilities for abuse.
A digital system takes care of this for you – by automatically awarding loyalty points only when a certain behavior has been recognized by the system. For example, the POS knows when a customer has purchased a retail product and can award the right number of points.
With a manual tracking system, a staff member could easily stamp or punch a card twice if they wanted to help out a friend. The same holds true on redemptions, the system will automatically manage point balances and restrict redemptions of rewards only when appropriate.
Are you a franchise owner that collects a revenue share from each franchise? A loyalty points program works with you to ensure that franchisee locations reports accurate collections.
For example, if your loyalty points program awards customers’ points for every service or retail product they purchase, the customer will be sure to check that their transaction is properly recorded in order to earn their points.
There are many ways to shape and structure your rewards program. Depending on your location, you should check accounting and laws around these programs before implementing.
To be successful, keep it simple for your customers and staff and don’t forget to make the rewards seem special. You can easily reward your customers while encouraging repeat visits and improving your profitability.
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