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Making a customer loyalty program work for your small business

Loyalty programs aren’t just for big box stores – for smaller businesses they increase customer retention and help fine-tune your marketing approach, ultimately providing a low-cost means of building a strong relationship with your customers. And as a business, you have the benefit of being able to customise your approach to your specific, local customer base without jumping through hoops to try to appeal to a national audience.

So how do you get started?

Decide on the Type of Loyalty Program

There are multiple types of loyalty programs to choose from, and although digital options like smartphone apps are possibilities, email sign-up programs, punch cards, and scannable membership cards are solid, accessible solutions that don’t come saddled with a huge initial price tag.

Savings offers exclusive to email newsletter

subscribers draw in repeat customers and boost revenue. Customers sign-up in store or on your website to receive private coupons, sneak peeks at upcoming sales, or exclusive freebies for shopping on a certain day.

Punch cards,

where customers get a reward after a certain number of purchases or visits, require a small startup cost and no significant time investment afterwards – just design and print the cards, hand them out, and come up with a unique way to mark the cards to avoid fraud. A custom stamp with your store’s logo is relatively cheap and decidedly effective.

Branded membership cards

offer all of the customer benefits of punch cards and email offers – use it to create a points-based reward system, dole out rewards after a certain dollar amount is spent, and/or give card holders a discount in store. These cards can be as simple as a digital punch card, or come complete with access to customer relationship tracking software that details purchase habits, demographic information, and more.

Nail Down Your Rewards

Customers love free stuff, but they don’t love useless free stuff. Keep cost and branding in mind when choosing rewards, but also think about your customers and what they will actually like. There are three primary types of rewards.

Savings opportunities: 

Percentage- or dollar-off coupons and early access to sales appeal to most customers and directly increase your revenue. Customers spend more when they think they’re saving money, and a local business offering this type of reward feels exclusive to the average shopper, increasing loyalty.

Experience-minded opportunities:

Get customers in the store and involved with your business. A local hardware store offering free monthly workshops to program members shows customers that the store wants to help, and also drives foot traffic. A workshop attendee might get inspired to build more projects at home, thus need supplies, or simply see a great deal on power tools they just can’t pass up when walking in for the event.

Free products:

This type of reward gets tricky – branded pens and fridge magnets don’t exactly prove to be memorable gifts. But rewards like a free appetiser at a restaurant, a bottle of nail polish from a nail salon, or a pet toy handed out by a kennel are all relatively low-cost, appealing to the customer base, and simple to manage.

Put it All Together

Pick a loyalty program and a reward system to develop a unique-to-your business offer that draws new customers in and keeps repeat customers coming back for more.

When you’re getting everything set up, remember to:

  • Tailor everything to your specific customers.

  • Switch up rewards to keep things fresh – people will get bored if the gift or offers are always the same.

  • Make reward tiers attainable for your customers, but cost effective for your business.


No matter what route you take, use your small business status to your advantage – although your budget may not match that of a national retailer’s, you have 100% creative freedom and the ability to interact with your customers every day.


Find out what they like, what they want, and build from there.

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