Three amazing loyalty scheme ideas for SMEs

Three amazing loyalty scheme ideas for SMEs

Rachel Ramsay

Rachel Ramsay
22nd June 2018

No matter how big or small your company is (looking to be your own boss? Check out our guide on how to become self employed), you don’t need us to tell you how important it is to encourage repeat business. It’s why many big businesses incentivise loyalty by offering reward programmes that encourage customers to keep coming back for more.

According to consumer research, a loyalty scheme makes 72% of us more likely to shop with a particular business, and that’s something that businesses of any size can benefit from. We’ve probably all got a purse or wallet full of store cards that gather points each time we spend, but as we’re about to find out, you don’t have to be a retail giant like Tesco or Boots to benefit from a loyalty programme. Here are some loyalty programme ideas that you could adopt for your own business.

1. Free stuff

We all love to get something for nothing, and that’s exploited by the classic loyalty reward programme model: offering customers a freebie after they’ve visited a certain number of times or spent a certain amount. These typically work by allowing customers to collect stamps each time they spend a certain amount or buy a certain product from you.

The most obvious example is coffee shop loyalty cards, which give you a card to stamp each time you get a hot drink, eventually giving you the 10th one free. A variation on this idea is Costa Coffee’s Coffee Club, which earns the customer points towards free drinks and other treats. Starbucks – though admittedly not a SME – goes one step further and uses its Starbucks Rewards scheme to give customers special offers, mobile app payment options and exclusive early access to new products.

But coffee shops aren’t the only SMEs to offer this kind of loyalty programme. The Mexican food chain Mission Burrito, for example, offers a free burrito when you collect enough stamps, while The Codfather fish and chip shop gives you a free meal ticket when you’ve collected 10 stamps. Restaurant chain Bistrot Pierre’s Mon Pierre Rewards programme gives you points based on how much you spend, giving you free food and wine in return.

And, while Nandos isn’t exactly an SME, its loyal scheme is worthy of note and replication by smaller businesses. Each time you spend £7 you get a ‘chilli’, and each line of your loyalty card you complete, you’re entitled to progressively bigger perks. For example, after you’ve collected three stamps, you’ve earned a free appetiser or quarter chicken. After six stamps, it’s a half chicken or single burger, pitta or wrap, and after ten, a whole free meal. It’s a fun way to encourage people to keep coming back to get ever better rewards.

2. Exclusive discounts

An alternative to offering a free product is to offer a discount. Hair and beauty salons are a great example of SMEs getting in on this act, such as hairdresser Bei Capelli in Oxford, which offers 20% off your sixth visit with its loyalty card scheme. Toni and Guy is another one, with a reward card programme that, in addition to competitions and special offers, gives you points for every £1 you spend, to be redeemed for money off a range of their hair services and products.

Hotels are another kind of business that have long been taking advantage of this kind of loyalty programme to lure customers back. Handpicked Hotels, for example, has the ‘Privilege Rewards’ scheme that earns you one point for every £8 you spend on rooms and dining in any of its 20 hotels. It also gives you membership benefits such as discounted room rates, upgrades, and advance notice of special offers. Customers can use their points to get money off on hotel stays or to pay for food, with 35 points being enough for afternoon tea.

On a bigger scale, Co-op’s membership scheme gives you back 5% of everything you spend on its own-brand products and services, and you can spend that 5% in store. As a nice bonus, an extra 1% is donated to a local charity in your community, and you can choose which one you want to support.

3. Partnering with local businesses

While the loyalty programmes we’ve looked at so far encourage you to keep coming back to the retailer that runs them, the Oxford Mail newspaper has a slightly different spin with its loyalty club.

Reserved for people who get the Oxford Mail delivered, it’s a scheme that gives readers a minimum of 10% off at a range of other businesses across the county. For example, readers can get 50% off an MOT at Banbury Car Clinic, a free main course at Thame Recipe and 15% off at the Oxford Wine Company.

While this loyalty programme model isn’t necessarily going to be ideal for every SME, it nevertheless raises an interesting point: that it can be worth striking up partnerships with other local companies to help support each other’s businesses. If you agree to offer their customers a discount via a mutual loyalty scheme, and they do the same for your customers, you both have the potential to benefit from the loyalty of a bigger shared customer base.

Loyalty schemes are a fantastic way to keep customers coming back, but they’re not the only way of encouraging repeat business. Have a read of our article on How to increase sales and repeat visits by building brand loyalty for even more great ideas.