How to Create the Perfect Customer Rewards Program: 3 Tips

As a small business owner, you know how important it is to retain your customers’ loyalty, trust, and business. After all, to acquire a customer in the first place, you have to do a lot of legwork—market your services or products to them, provide a great customer experience, and continue to engage them after important touchpoints.

To get the most out of the time, money, and hard work you invest, you need to continue building on the foundation you’ve established with your customers and ensure that they return to work with or buy from your business again and again.

This is why it’s a great idea for small businesses to focus on creating customer rewards programs, also known as customer loyalty or brand loyalty programs. There are several benefits to starting a program like this:

You’ll incentivize customers to keep coming back to your business for regular services or product purchases, but you’ll also incentivize them to increase their engagement and spending to secure rewards.
A great customer rewards program can be an excellent marketing tool for attracting new customers.
These programs can provide your business with more customer data that empowers you to make informed decisions about the rewards, products, and services you offer.

Knowing all the benefits in store, you’re likely ready to launch your own customer rewards program. Let’s dive into three tips for creating the perfect customer rewards program for your business!

1. Get to know your customers’ wants and needs.

To set up a successful customer rewards program, you’ll need to cater to your community of customers and their specific wants and needs. The only way the incentive to participate in the program will work is if customers see the potential value they could tap into by joining your program.

One of the best ways to get to know your customers’ wants and needs is to analyze the data you’ve collected about them.

For example, if you’re a pet-care business using dog daycare software, you might take note of your daycare attendees’ birthdays and offer a special program perk on those days. Or, you might see that many of your customers frequently buy a certain dog shampoo when they pick their furry friends up from daycare. You could then offer a punch card for shampoo or other grooming product purchases, rewarding the customer with a free product or service after a certain number of purchases.

Using your customer data is just one way to take the guesswork out of building your customer rewards program. You can also go straight to the source—your customers themselves—and send out a survey! Keep the survey short and to the point. Focus on asking them what rewards they want to see that would make their experience with your business even better.

Customers might respond to your survey letting you know they’d like to receive special discounts, free products or shipping, or perks for engaging in sustainable shopping practices like bringing their own bags to shop at your store. Use these ideas to begin designing rewards that will pique customers’ interest!

2. Design valuable rewards for a variety of customer actions.

Next, you’ll need to identify the rewards you’ll offer in your program and what customer actions will trigger those rewards. Remember, your rewards will sell your customers on joining your program, so they should offer additional value that supplements the value customers already receive when interacting with your business.

Whatever customer actions you choose, you should focus on rewarding consumers who frequent your business. This will motivate them to continue working with you or buying from you. As far as rewards go, feel free to get creative! In addition to free or discounted services and products, you might offer early signups for your most sought-after services, set up a masterclass to share your expertise, or plan special events for program members.

At this point in the rewards program creation process, you should also determine the structure of your program. Here are a few ideas for setting it up:

Determine membership tiers. Frame your rewards program as a membership program. This will create a feeling of exclusivity for those who join. You should also set up tiers that help guide the rewards process. For example, you might create bronze, silver, and gold tiers based on how much a customer spends at your business every month, with different perks for each tier. Obviously, the perks will grow as customers move up the tiers. For instance, say your pet grooming customers can join a membership program with chihuahua, corgi, and golden retriever tiers. As they spend more, they’ll move up to higher tiers, unlocking different grooming service discounts at each level of the program.

Offer punch cards. Punch cards allow customers to visualize how often they need to buy from your business to gain a reward, such as a discounted service or free product. For example, a sandwich shop might offer punch cards that are punched every time the customer purchases a full-size sandwich. After a customer gets 10 punches, they could receive a free combo meal. After 20 punches, they could receive two free combo meals and a chance to enter a raffle for a catered workplace lunch.

Create a point redemption system. Point redemption systems are simple—the more money a customer spends, the more points they earn. Once someone earns a certain amount of points, they are eligible for a specific reward or can use the points to cover the full or partial cost of a service or product. For example, say a customer at a beauty salon earns 25 points every time they spend $50, with 100 points getting them a free haircut or French manicure.

Remember, your customer rewards program is yours to design and execute. While it can pay to be creative, use caution and keep your program simple and easy to understand. Customers should be able to quickly learn about your program and the perks you’re offering and clearly see why they should sign up for the program.

3. Get your customers on board.

Once you’ve designed your customer rewards program, it’s time to let your customers know about it and encourage them to sign up!

Start by marketing your program using what you currently have in your tech stack. Let’s say you have cloud-based, all-in-one software specific to your industry. For example, when pet-care business owners use Gingr’s boarding software, they gain access to built-in email and SMS marketing features that are easy to use to connect with customers. Or, if you regularly use Instagram to share information about discounts and special offers, you might create a few posts and stories about your program and encourage your followers to share these with their personal networks.

As your business grows and your marketing strategy expands, continue folding in various marketing channels. You’ll also want to keep promoting your customer rewards program along with your regular services or products, whether you’re doing so via direct mail, your website, radio ads, or other channels. Using more channels will help expand your reach, as you’ll be spreading out your efforts and not putting all your marketing eggs in one basket.

As you’re advertising your program, make sure the process to sign up is quick and easy for customers. If customers will enroll themselves on your website, keep the enrollment form short and only ask for necessary information. If you offer to enroll customers when they pay at your physical cash register, make sure it will only take a few seconds.

Creating a customer rewards program is a great way to engage your current customers, market your business to future customers, and gather more information about your community and what your customers want from your business.

Use these three tips to start creating the perfect customer rewards program for your business, and you’ll see these benefits affect your business for the better. Good luck!