How To Grow Your Business with Online Loyalty Programs

online loyalty program marketingJust like supermarkets and large chain stores have loyalty and rewards programs, small- and medium-sized businesses can create online variations that will bring traffic to their websites and social media pages and – in so doing – build brand buzz, increase search rankings, improve web traffic, and (ultimately!) increase leads and bookings or sales.

For an online loyalty program to work, however, it has to be strategically planned and must reward clients and potential clients for behaviors beyond buying products or services. Instead of offering points to redeem or special pricing for club members, online initiatives have a slightly different focus. They encourage clients to actions such as commenting on or sharing Facebook posts or responding to Tweets, joining email and newsletter lists, and entering contests or sweepstakes on Facebook.

Online loyalty and rewards programs can be strategically beneficial for small- and medium-sized businesses in the same way that any or all online marketing activities can be beneficial for businesses — that is, if they’re planned well, if they’re executed and managed well, and if analytics are used to carefully measure results.

What does good strategic planning look like?

If you want your online loyalty or rewards marketing to bring results, strategic online marketing planning is crucial. A thorough and detailed plan for your loyalty program should include:

  • Detailed analysis of the target market – who is your top prospective customer or potential future best customer?
  • Benchmarking the competition – what is everyone else doing and is it working?
  • Analyzing your industry – what’s hot and on trend?
  • Overview what tools are available – how could this work?
  • Assess the resources (staff, budget, assets for cross promotion) – is this possible with what we have?
  • Capture a detailed timeline – what will happen and when?

An effective loyalty or rewards program will be designed to respond to those questions and answers precisely. That’s not all a well defining marketing strategy should do.

It is important to find a balance between speaking to your existing clients and potential customers. Some businesses will focus solely on existing top spenders, which is a risky move. It doesn’t pay to make assumptions about who will buy the most in the long run. Ideally, you want to move existing one-time or infrequent customers to more frequent consumers. Be wary of customers who follow coupons and rewards, chasing the best deal of the day and rarely develop loyalty for one brand. Put your time and energy into building repeat customers.

A good online marketing agency will offer a stand-alone strategic planning service so that a business owner can determine whether to include an online loyalty program in their overall online marketing plan.

Benefits of a successful online loyalty or rewards program

When you launch a well articulated and executed online marketing initiative it should build brand recognition and buzz. Some will also:

  • Increase an online fan following and social shares
  • Drive web traffic
  • Improve online presence
  • Leverage referrals by taking advantage of the free online and social word-of-mouth advertising
  • Increase leads and sales to boost your bottom line

Achieving success by attracting new customers or getting existing clients to spend more is customer acquisition, which in any form requires some investment in marketing dollars. An exciting and enticing loyalty and rewards program that gets people talking about your business and raises the profile of your brand within your target demographic through positive online sentiment will generate growth in social following, leads, and sales.

How can small businesses generate buzz online?

There are several types of online loyalty and rewards programs that work really well for small- and medium-sized businesses online using existing social media platforms. The best kinds will drum up excitement among target market members. Those that require very little effort from members or customers (both to sign up and to redeem) are typically the most popular as well. Here are some examples of campaigns to consider:

  • Enter for a chance to win and automatically receive a coupon for redemption in-store or online
  • An Online Community VIP Program, Secret Sales, or extra benefits
  • Share with your Facebook friends for additional points/savings
  • A social (Facebook / Twitter) contest or sweepstakes
  • An Email Only Promotion: Sign up for our eNewsletter for a special coupon or savings
  • Earn savings through a subscription service

Note: Facebook used to offer “like gating” for loyalty / incentive programs, contests and sweepstakes. That is, a prompt by a business’ page to “like our Facebook Page for a chance to win!”. No more.

In fact, this feature became obselete (against the rules) back in August as per this article, but Page admins had until Nov. 5, 2014 to become compliant. (As per Facebook, “You must not incentivize people to use social plugins or to like a Page…”

This isn’t such a bad thing. While like gating saw business pages earning quick and bountiful likes during promotions, the likes weren’t usually particularly valuable — they weren’t necessarily target market members, or they weren’t motivated beyond the “chance to win”.

So what now? Collecting target market members’ contact information (names and email addresses) and encouraging opt-ins should be the dual-focus (goal) of a social promotion, anyhow – not getting likes. And we can still do this.

So create engagement through a social promotion that encourages participants to visit your website or contest landing page (increasing traffic with a good call-to-action (CTA)), or – more – have them opt-in via a form submission.

You’ll find (if you’ve done like gated promotions in the past) that the new contacts, entrants, and prospective leads you gather now are more valuable and in-line with your goals than before. So it’s a good thing!

There are two goals any loyalty or rewards program should have. First, to increase referrals and sales through increased brand awareness and engagement. The by-product of this is to collect potential customer information to grow a client database of qualified leads. The second goal, which is equally important, is to make the customer feel valued by your business and connected through the online community you build for your brand.

Does a successful rewards program have to break the bank?

It is possible to run a successful rewards program without spending a mint, but, results are related to budget. If you spend more on advertising and promoting your campaign or program you are likely going to see more results. However, you can make up for a smaller budget with better planning and a good dose of creativity.

With little or no paid advertising, a business has to rely on online viral word-of-mouth advertising to spread information about the program. A creative, engaging, and exciting campaign is more likely to be shared. If budget is a concern, there are more predictably successful ways to grow online.

What other online marketing strategies work for small businesses?

There are online marketing tactics with more predictable results than a loyalty/rewards program, such as Pay-Per-Click (PPC) Advertising (or Facebook Ads, Google Adwords, etc.) that can help a brand quickly gain traffic or followers in the short-term, and Search Engine Optimization (SEO) that can help a brand improve search rankings in the long-term. Good search rankings can ensure a business/brand is easily found online when clients or potential clients search the internet.

If a business doesn’t have the resources to risk a first-shot at a loyalty/rewards program, we’d recommend these other online marketing tactics first. It is important to note that we would never recommend a tactic like an online loyalty program as a stand-alone endeavor. Instead we recommend implementing loyalty and rewards programs as part of a more comprehensive internet marketing campaign, or trying one of the smaller, low-cost, and easier-to-manage online loyalty options via a business’s existing social network.

A brand new business may be motivated to try a loyalty/rewards program right out of the gate in an effort to gain early engagement; however, a brand new business won’t necessarily have a sufficient client/follower base to get a rewards program off the ground, or a good-enough understanding of their target market / industry to design a built-for-success rewards program. Again, here, the strategic plan would be key.

We’d also suggest that an inexperienced small business, or one without access to great analytics tools, shouldn’t run a loyalty program without the advice and guidance of an experienced online marketing agency.

How can you tell if the campaign was worth the cost?

Measuring ROI (return-on-investment) in any marketing activity – either in the real world or online – is hard but one of the most important steps is to measure success. There are countless online analytics tools available that make online marketing efforts easier to track and measure than ever before. Just remember that knowledge is power. There are great tools and systems available, but if they’re too expensive, too hard to set-up, or too difficult to self-manage they can quickly become a disaster for a small business owner.

Due diligence is the key here. We recommend businesses:

  • Explore all the options a tool has to offer
  • Use free trials if they are offered
  • Run a small test program
  • Make sure the tool has great tracking options
  • Choose a tool that includes a data collection component (to help you collect and track opt-ins to grow your database)

Most importantly, carefully consider whether you and your team have the time and resources to run a successful campaign, including troubleshooting any hiccups or pitfalls and responding to additional customer service requirements that may arise.

Bottom line: Handle marketing with care

If you don’t have the time or resources to devote to thorough strategic planning, great execution, careful management, and perfect customer service during the campaign/program, as well as thorough analysis during and after the campaign, do NOT spend your valuable time and resources marketing this way. People who sign up or participate in a poorly planned or executed program can generate disastrous results very quickly because unhappy customers have unlimited potential to spread bad sentiments online.

As an internet marketing consultant, many of the campaigns I help my clients craft and execute include some variation of an online and/or mobile loyalty/rewards program. Contact me today for a free estimate or a free initial phone or Skype consultation if you would like to ask questions or find out more about my expertise managing all aspects of social media content for your business.

I offer a free website and online presence analysis report. Not only will I interpret the results for you, I can use that information to craft an online marketing strategy for your business or non profit organization.

Related Reading From Around the Web

  1. Is a Rewards Program Worth it for a Small Business? (Brent Purves interviewed in The Globe and Mail)
  2. When Loyalty Programs are a Waste of Money
  3. 4 Ways to Create Superfans for your Brand

Related Resources and Services from Brent Purves

  1. Online Promotions and Social Media Contests
  2. 5 Reasons to Hire Brent Purves as your Online Marketing Consultant
  3. Tips for Successful Business Website Development and Growth