08.13.2010

Technology Solutions To Maintain And Track Small Business Customer Loyalty

There was a time when the only way to track customer loyalty was to personally remember the names and faces of all your best customers. One of the first customer loyalty programs instituted by S&H awarded tiny green stamps with purchases that could be exchanged for rewards. It wasn’t until the 1980s that technological advances allowed airlines to process all the data needed to run frequent flyer programs.

Technology has advanced significantly since those programs began, but your task is still quite similar to that of the mail-order company in the 1930s. Namely, to identify your best customers, reward them for their continued patronage and encourage infrequent customers to return to your small business more often. When brainstorming for your customer loyalty program, keep these technological solutions in mind.

Point-of-sale Integrated Systems (POS)  — There’s a good chance you’re already participating in one of these programs through your local grocery store. The system tracks purchase totals and items purchased and can award discounts for specific items. Most systems combine with a Web presence to alert members about new promotions through e-mail.

• The upside: highly customizable, detailed tracking, almost entirely automated, simple for staff to use.
• The downside: expensive, overwhelming amounts of data.

E-mail List Management — E-mail is the heart of most customer loyalty programs. Whether you use a POS integrated system or just want to send a monthly newsletter, it’s worth the money to invest in an e-mail list management tool. Constant Contact and Mailchimp are two popular tools worth checking out. If your business is quite small, you may want to start out with Mailchimp, as there’s no charge to manage up to 500 contacts

• The upside: inexpensive, easy to use, great support.
• The downside: none. 

Some quick advice — Social media can take up a dangerous amount of time if your approach is random. Start by gathering e-mail addresses from your most trusted customers and send them a personal note asking where they’d like to see your business online. The same focus on personal service that has made your small business succeed so far will bring great returns online. Start locally and focus on quality over quantity. The numbers will follow!

Social media tools offer an inexpensive and effective way to connect with your small business customers. As you share information, interact and gather ideas, you’ll discover that your loyal customers actually take an interest in seeing your business succeed. These tools are inexpensive or free to use. The primary cost will be your time and that of your staff.

A Small Business Blog — A blog offers a modern alternative to the newsletter or e-mail promotion by presenting information on a single Web page that your loyal customers can visit and that new customers can find with an online search. You’ll also find that a blog makes it easy for you to share some of the personality and core values you bring to your small business to make it unique.

• The upside: inexpensive, easy to maintain, makes your business easier to find online.
• The downside: requires regular updates, focused creative energy and community interaction to succeed.

Facebook — When you e-mail your initial group of customers, many will mention a site called Facebook. If you’ve not used it before, Facebook is an online social network where users upload favorite photos and share thoughts about things they like. Creating a page for your small business only takes a few minutes. The real investment comes in the months that follow as you interact with the people who support and enjoy interacting with you as an individual.

• The upside: free to join (even for business), easy to maintain, can be synchronized with a blog, simple for customers to connect with.
• The downside: requires regular updates and maintenance.

Twitter — Twitter’s popularity is driven by its social simplicity. Think of it as a messaging service that allows you to send text messages to a group of people who all want to hear what you have to say. Twitter is a great place to share interesting thoughts and information about your small business and local community.

• The upside: free, easy to maintain, some customers who might not want to receive e-mails from your business will gladly follow you on Twitter.
• The downside: requires maintenance and will show little in the way of direct returns unless coupled with a marketing program or specific promotion. 

A note on tracking — How will you know if your loyalty program is a success? How are you going to make sure you reach that point? Tracking your customer loyalty program isn’t going to be much fun. Numbers rarely are. Unless you use a point-of-sale system with member cards, you’re destined to spend a significant amount of time tallying up member participation and purchase totals. Program benefits – program costs = either a profit or loss. Without consistent and accurate tracking you might be one small change away from a smashing success and never realize it.

Tracking tip: When making a special offer or promotion, require participants to present a special passphrase or key code to take advantage of the offer. Compare the number of people who might participate (e-mail recipients, blog visitors and Facebook or Twitter followers) with the number who take advantage of the offer to determine your rate of conversion.

— by Seth Simonds