A Checklist to Get Your Customer-Loyalty Program Off the Ground

With more companies vying for consumers' attention (and money), businesses need to create loyalty programs to get customers on board and to stay. Here is a checklist to create a program in the digital world.

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Customer loyalty should be a go-to strategy for any small business, but the truth is, regardless of if the program is digital or an old-school punch card, small-business owners don't feel like they have the time to take on more responsibility.

But launching a customer-loyalty program doesn't have to take a village. And what is the worst thing that can happen if you take a few extra minutes to implement one? You reward your existing customers, increase sales and maybe even gain a few new ones? Sounds like a win-win situation.

But unfortunately many entrepreneurs aren't taking advantage of this opportunity. Nearly seven in 10 small businesses (66 percent) don't have a customer-loyalty program and, of those that do, less than half have a digital program, according to Manta's joint report with BIA/Kelsey. This information came as a surprise: Customer loyalty is not only a way to drive customer retention but also helps boost sales and grow a business. So what are you waiting for?

Here is a checklist for creating your own digital customer-loyalty program.

Start with the end in mind. Before you get ahead of yourself, take a step back and decide what you want to get out of your customer loyalty program. Improve customer acquisition? Decrease customer churn? Increase order size? Make these goals as specific and as measurable as possible. You should also attach a timeframe to each. For example, "I want to decrease customer churn by 20 percent in the next 18 months." Attaching a timeline will help you stay on track along the way.

Related: Why Small Businesses Should Be Utilizing Customer-Loyalty Programs

Determine your audience. Next, think about who is going to be eligible for the program. Your business may want to target customers based on spending thresholds, purchases per year or even specific products. Having a targeted loyalty group will allow you to reward ideal buying behavior and drive more of it.

Automate, automate and automate. Did I mention automate? There are many ways to automate customer loyalty programs. The more automated your program is, the easier it will be to manage and maintain. This does not mean that personalization is lost. There are many types of automated programs like Belly and LevelUp that you can deploy while still maintaining a personal touch.

Reach out and touch a customer -- with email. Staying in touch via email is one of the easiest and most effective ways to kick off a digital loyalty campaign. Start simple by creating a steady stream of communication around your loyalty program. Take a look at free or low-cost email-marketing solutions, such as Campaigner, Constant Contact, Vertical Response, and MailChimp. These are all easy to use and tailored for your business needs.

Related: 4 Unconventional Ways to Turn Customers Into Brand Advocates

Keep your customers engaged. Target communication to your customers' interests and preferences. For example, if you have 15 customers buy yellow rain boots, you can engage with these customers by sending each an email with information about a complementary yellow umbrella. Customer-relationship management software, email and automation provide information about your customer base that can be leveraged to create personalized communications and increased sales.

Go social. Social media is an extremely effective way to engage with existing customers on a regular basis. Take the time to understand which social-media channels -- Facebook, Pinterest, Foursquare and Instagram to name a few -- your customers engage with the most. Once you've selected the right network(s), build your social community through varied and engaging content and posts – creating many options for sharing and referring.

Bottom line? For most businesses, it can cost up to 10 times more to acquire a new customer than to retain an existing one – all the more reason for customer loyalty. So, go on, give it a try.

Related: 10 Tactics for Increasing Your Customer Value and Loyalty

Jed Williams and John Swanciger

Jed Williams is the vice president, consulting and senior analyst for BIA/Kelsey, a research and advisory company focused on the local-advertising marketplace. John Swanciger is the CEO of Manta, an online community for small businesses. 

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