“Loyalty marketing” is based on the idea of cultivating and nurturing strong relationships with customers and clients to encourage loyalty over time. Businesses who adopt this are more likely to result in business growth and success. It is said that it costs up to 10 times as much to win a new customer than to keep an existing one.

What is new in loyalty marketing?
Clever ways to encourage customer loyalty have been developed by top brands. The good news is smaller businesses can replicate these approaches.

1. Offering discounts
Using direct marketing techniques through mail, email and now SMS texting, it is possible to direct exclusive discount offers to your existing customers. Here are some tips:

• To make your discounts truly exclusive, use promotion codes for redeeming online or printed vouchers.
• Using cash values on your vouchers will give them high perceived value. 
• If using e-promotions, ensure you create a “landing zone” dedicated to your promotion so customers can quickly click through and select your best offers.
• Vouchers can be delivered to customers via SMS text. Find out more about mobile commerce ? vouchering and crediting from the Internet Advertising Bureau UK (IABUK) website.
• Does your business depend on walk-in traffic from the street ? e.g., a restaurant, bar, hair and beauty salon, coffee shop, car oil change stop? You could consider location-based marketing: using mobile networks to offer customers discounts and offers through their smartphones. (This approach tends to be used by younger, tech savvy people who pass on good deals to others through their networks). Find out more about the benefits of offering discounts through location-based mobile marketing at the IABUK website.

2. Loyalty cards
Encourage your customer to come back for more with point systems or cards that can be stamped to collect free gifts and complementary items. Find out more about structuring effective loyalty programmes at the CRM Trends website.

3. Hospitality
Stores can send out exclusive invitations for loyalty card members to take advantage of a pre-sale or pre-season shopping evening. Add value with fashion shows, demonstrations and complimentary glasses of champagne.

Extending hospitality to a customer or client has traditionally been one of the most effective ways of cementing a relationship and making a confident statement about your business. However, some organisations have strict rules about what their staff can or cannot accept. The advent of the bribery act (see our regulation page on the Bribery Act 2011) means that policies deeming what is “proportionate and reasonable” hospitality may be tightened.

4. First impressions are lasting
Identify what is the first thing that people come into contact with when approaching your business, and make it as attractive and approachable as it can be. Is it you, yourself, or your business card? Is it your answer phone message or your website/email response to their web enquiry? It could be your van, your front door or your shop window. Make it sparkle and make your customer feel really welcome.    

5. Reciprocal discounts
You could team up with some business associates or approach related businesses to offer your customers a quid pro quo deal. For example, if you provide lessons in a sport or other skill you could arrange for your students to get discounts at a favoured supplier of their specialist equipment. In return, the stores could refer its customers to you for discounts on lessons.  

6. Say thanks with a card or note
Once you have a new customer?s details it is tempting to get them onto your sales contact database for sales offers. If they first received a courteous personal note or card thanking them for their business, think how much more receptive they would be to your follow-up sales messages.

Who to focus on
If you have a large customer base it may be profitable to focus loyalty offers and rewards on those customers with the highest potential lifetime value to improve profitability. Use our interactive tool to identify the customers most valuable to your business.