You might be thinking that starting a loyalty program for your customers isn’t sustainable and might even cost you money rather than more profit. Fortunately, no, that’s not always the case! Here’s how to launch a loyalty program to help you gain loyal customers and thus, boost your sales!
What is a Loyal Customer?
Customer satisfaction and customer loyalty are two different concepts, but it’s important to understand both so you know how to measure them.
Customer satisfaction is when you measure your customer’s attitude towards your product, your service, or your brand. The measurement is usually done through customer satisfaction surveys on a numerical scale. As a cafe entrepreneur, you want your customers to be satisfied with the drinks you serve, as well as the whole experience you sell–ambiance and customer service.
Customer loyalty, on the other hand, is forward-thinking. It is a set of behaviors and attitudes that exhibits loyalty to your product, your service, or your brand. For instance, repeat purchases or choosing to have coffee in your cafe over a nearby competitor. It’s a feat in itself to entice a customer to come inside and try your coffee for the first time, so it’s a challenge to make them come back as well! So as a cafe entrepreneur, you want your satisfied customers to be regular, loyal customers.
Having loyal customers is a continuing and progressing effort wherein customers do business with you over time. So be sure to keep great customer service + great quality offerings so you can turn satisfied customers into loyal customers.
Why is the Loyalty Program helpful?
The coffee market in the Philippines is booming. Almost everywhere you look, there’s competition. Cafes and other beverage serving establishments like milk tea shops are common in the country. This PSA report of 2019 ASPBI states that there are almost 2,500 establishments for beverage serving activities.
As time progresses, you will profit more with repeating customers than hope for new customers to come all the time. The latter doesn’t also inform you much if there’s a possibility for more profit every time. A useful and effective device for ensuring repeat customers is a well-maintained loyalty program for your customers.
A regular cafe goer would probably think like this: “An iced coffee sounds good right now. Should I try this new coffee shop or should I stop by my favorite cafe where I can get a free drink soon?”
An enticing cold caffeine drink or a staple hot cup of joe is already tempting. A loyalty program that rewards customers for buying something they already like makes it even more irresistible.
Factors to consider in creating a Loyalty Program
A loyalty program incentivizes repeat customers. Most commonly, these incentives are free items or discount offers.
- Consider your goal.
Make sure your loyalty program adheres to your business goal. For example, if you want more frequent customers, your loyalty program should highlight a free drink or a big discount after they have completed a certain number of purchases.
Make sure your loyalty program is easy for you AND your customer.
Make it simple and easy to understand. It will not just be exciting for your customers, but can also lessen the load of your staff, especially during busy hours! You wouldn’t want to add an extra layer of unnecessary pressure on your staff with overdone, complicated loyalty program rules and terms.
- Make rewards valuable.
A great way to start giving away rewards would be a free upsize on their 5th visit, a free drink (with a purchase) on their 10th visit, or a free pastry on their birthday.
But don’t overdo it. You might lose profit instead of increasing it. Don’t spend too much just to have a customer loyalty program. A free bundle of drinks after 8 visits won’t do your business any good. A free extra cup of milk for your customer’s coffee isn’t ideal either.
Loyalty program formats
If you’re still starting and don’t have an extra budget for a newer loyalty program format, a stamp card will do. An eye-catching design for a business card can surely pull interest.
Stickers are also an easy way of stamping. Just make sure to explicitly state that any tampering will not be counted to avoid transferring of stickers from one card to another.
If you’re capable of spending more, you can invest in digital apps. They tend to be the preferred mode in this digital age. With an up-to-date app, customers won’t have to scramble through their bags or wallets just to find out they left their stamp card in their other bag at home. With just a tap away, phone apps appear to be more convenient and always ready.
And for these formats, you can use one (or more) of the following basis for rewards.
Basis for rewards
Frequency of visit and purchase
A customer gets a stamp with no minimum purchase. Every visit to your cafe to purchase anything, they receive points. This is especially great for digital apps loyalty program format, for easy tracking of points.
Favorite order
An enticing reward would also be their favorite item from your menu. Whether that’s a free iced latte after purchasing 7 iced lattes from previous visits. Or buying 7 caramel macchiatos at once, they get another one for free. That’s pretty tempting! Once they accumulate a number of stamps, whether a physical card or digital app, they get one free favorite from the menu.
Transaction value
Your customer receives a certain number of points depending on their transaction value. After they accumulate the number of points for the reward, they can redeem a free drink of a certain size or pastry they like. If they want an upsize (and surely they’ll do because of how good your cafe’s drinks are), they can pay whatever’s left for the full price.
How to Market the Loyalty Program
Let your regular (and new) customers know about your new promotion! Whether online or in-store, you will want to make sure more people know about your new Loyalty Program.
You can use your established social media platform to promote the program, in addition to using it to share the love for coffee! It’s also a way to market it paperless.
In-store, you can have your friendly baristas tell customers about the promo to customers in the register. Train them to be approachable and friendly marketers. It will not just boost sales, but you might be training your baristas more skills for business!
Another in-store marketing approach is chalkboard signages. With creatively designed signages, waiting customers can read about it before getting to the register. Another is your menu board. Customers look at the menu board before they order. And they might just be looking at a new rewards program for them!
Evaluate as you go
Once the loyalty program is up and running, always check if it’s efficient and effective for your business. Remember, a successful program, in its simplest sense, will bring you more customers without losing capital!
Customer loyalty doesn’t just drive you to create more profit but builds your capability to provide the same high-quality coffee products and customer services every time.
