Building Your Customer Loyalty Program Without Breaking the Bank

Building Your Customer Loyalty Program Without Breaking the Bank

In late May of this year, I walked into the bookstore Indigo intent on buying a novel that I had wanted to read for a long time. I had some much needed time off coming up and was looking forward to curling up with my new book. To my surprise and delight when I got to the cashier to pay, she offered me a beach lounger, of all things to go along with my purchase. I was receiving this bonus gift because of the amount I spent. The timing was perfect! It had been a long cold winter, and the idea of relaxing at my local beach with my bestseller protected from the sand by my new lounger made me look forward to my vacation even more. What made this experience even better was the element of surprise.

I always appreciate those moments when a product or service I love unexpectedly comes with a special offer! Major brands have undoubtedly caught on to this practice, and we see loyalty programs popping up all around us. Most notably, companies like Amazon, Netflix, and retails like shoe brand DSW and cosmetics giant Sephora have used this trend to their advantage.

For small business owners looking to get on the loyalty train, weighing the value of rewarding customers against keeping costs low presents a challenge. Without the budget of a large corporate marketing department, how can smaller shops compete? Building a loyalty program that excites and engages your customers on a much smaller scale than a major corporation or retailer is possible. Buzz phrases like “customer journey” or “voice of the customer” are sometimes useful, but at its core, what we are talking about is treating people as you would wish to be treated and this includes the very human need to feel recognized and valued. As was the case with my bookstore experience, there are timeless principles for keeping customers happy and engaged. When we pair these fundamental principles with innovative new technologies and creative planning, you will see how small businesses can get in on the loyalty program action on a budget. Below I discuss how to build your program by looking first at types and characteristics of loyalty programs that work then I explore the benefits and best practices used by big brands, finally, I layout creative ideas and resources to inspire you to implement your loyalty program without breaking the bank.

Although cost constraints exist for entrepreneurs trying to design their own customer loyalty programs, the benefits are convincing and well documented.


  • They are popular with consumers. It’s hard to deny the appeal of deep discounts or giveaways
  • Rewards programs are a way to distinguish companies from their competition
  • There are many studies to support the value of cultivating customer loyalty. Loyal customers tend to take action and spend with companies they like.
  • Loyal customers sing the praises of brands they like on social media and through word of mouth, creating an invaluable positive reputation that traditional advertising can’t match.

Caution! Prepare Before Your Program Launches

Before you decide which type of Loyalty program you want to implement, Outline your goals, plan for data protection, understand your audience and evaluate customer reward programs of best-in-class organizations. Document short term and long term goals, tracking requirements, deliverables and launch timing, as well as how you will track program results and impact. Listed below are a few of the possible goals you could be wanting to achieve:

  • Increase sales
  • Gain valuable word of mouth for your product
  • Grow your customer base
  • Improve Customer Engagement
  • Get feedback on your products and services
  • Use a new loyalty program as a way to win back customers who are unhappy with the service they have received

NO Data Protection – No Program

As the list of well-publicized data breaches grows, consumers become increasingly wary of providing personal information to business owners. A survey conducted by The Harris Poll on behalf of Wilbur shows that 76 percent of Americans are more likely to join a program that collects only their name and phone number. As you design your Loyalty program keeping your customer’s data safe should be top of mind. Put the same stringent rules and protections in place for your customers as you would want for yourself. Only collect information necessary for your particular offer and be open about the security programs used. If your customer base grows, have a clear strategy and understanding of your need for increased data protection. For customers to feel comfortable providing you with even minimal personal information, they should be opting in and have a clear way to opt-out. Make sure your customers know that your loyalty program is not just a data grab.

Know Your Customers But Beware of Freebies

Be prepared to figure out who your top customers are. What are their pain points and preferences? Design rewards that will excite and inspire your biggest fans.

Don’t focus too much on giving everything away for free. While freebies may seem like the best way to appeal to your potential clients, promising exclusivity can be more effective than giving things away. Business owners run the risk of devaluing products and services with too many giveaways.

Types of Loyalty Programs and Examples From Big Brands

5 Creative Ways to use Components of Loyalty Programs for Your small business

Typical Loyalty programs do not work for some entrepreneurs or small and medium-sized businesses. If for example you are selling services like training courses or coaching you may need a unique program that takes parts of traditional models that we looked at earlier but allow for customization. The beauty of having a smaller customer base is that you can offer personalized experiences as part of your loyalty program. Consider any of the following out of the box ideas:


Copy of Creative Loyalty Program Ideas by abariasbiz


About the author

Ayanna Baines-Arias administrator