Christy, Social Media & Marketing
Many loyalty programs (including Ox&Pen Version 1.0) award points for check-ins at shops and restaurants—check-ins that don’t necessarily translate into revenue for the merchant.
Presumably it’s great if a loyalty app shows a shop owner that 89 people checked in at their establishment last week, but what is the value of each of those check-ins? Did each person who checked in spend $5 or $50, or $0? How does the average ticket of the “check-ins” compare to the amount the average customer spends? By rewarding check-ins with points that are redeemable for rewards, the shop owner is paying for each check-in, so the resulting revenue is of critical importance.
Is it possible to reward customer behaviors that bring in revenue for the merchant? Below are three actions that business owners value. At Ox&Pen, we’re working to redefine loyalty to include each of these metrics, which when coupled with a customer check-in, prove to be more deserving of rewards than check-ins alone.
Arguably the most obvious desire of a small business owner is for customers to make purchases. Rewarding customers for every dollar they spend is something credit card companies have been doing for years; through strategic reward initiatives, it could be the norm for small business loyalty programs.
By offering rewards for shopping and dining at certain shops and restaurants, loyalty programs can influence consumers to do more spending at small, local merchants, which is a step in the right direction to competing with larger-than-life corporate chains.
Customers sharing experiences with the merchant through social channels
Even if a customer doesn’t spend copious amounts of cash with each visit, he or she may be broadcasting the merchant’s name to hundreds or even thousands of friends and followers on Facebook and Twitter, which could end up being just as valuable for a small business as money spent.
Word of mouth marketing has long been a favorite buzzword of marketers; Nielsen reports that 92% of consumers trust recommendations from people they know, while only 37% trust search engine ads and 24% trust online banner ads (Zuberance). In terms of creating brand awareness, channeling resources to get people to talk about a brand seems to lead to a higher ROI than a big media buy.
Social loyalty programs, in particular, are in the unique position to incite a word of mouth movement. By rewarding people for sharing merchant experiences on social networks, business owners are investing in the type of exposure that has been proven to spur visits and spending from a new, expanded pool of customers.
Customers returning to spend more money
The only thing better than a customer spending money at a small business, is a customer returning again and again to spend even more money (slaps forehead). This is, of course, consumer loyalty in its truest form, and something that can be achieved with the help of a strategically employed loyalty program.
Loyalty is changing
No, running a successful small business can’t be drilled down to three generalized items. Rather, I’m inviting interested parties to take a look at the changing game of loyalty. How can loyalty programs reward customers for their actions that matter most to the merchant’s bottom line?
Since inception, Ox&Pen has sought to bring real value to local businesses by focusing on increasing the consumer behaviors that they value most, like dollars spent and social shares. After working with Chicago’s local, independently-owned merchants for a year, we have learned so much about what they need from a loyalty program. At the end of the day, they need more customers spending more money.