I’ve always believed that loyalty is a two-way street. You can’t expect people to keep bringing you their money if you aren’t giving them something back. Our rewards program is an important way for us to let our customers know every day how much we appreciate them and their business.

 

My late sister, Michelle, and I started our hand-crafted skin care products business, ScrubzBody Skin Care Products, in 2006. We began by making our body scrubs in my kitchen and distributing it through wholesalers. When sales really started taking off, we expanded our operations and eventually opened a retail space in Bethpage, New York.

 

Building customer loyalty by giving back

I quickly discovered that I enjoyed working one-on-one with customers more than meeting with distributors. But because I was new to retail, I started reading books on marketing and hit on the idea of offering a formal customer loyalty program. I liked the idea of giving something back to my customers, so I had a stack of punch cards printed up and started passing them out. Customers earned a punch every time they spent $20 or more, and after 10 punches, they got $20 off their next purchase.

 

Our customers loved it, and they snapped them up. You could see the excitement on their faces, but for us it was a way to make them feel special. The punch card was this little golden ticket that promised future rewards. If first-time customers were reluctant to take one, that was fine with me. I would assure them that when they came back the next time—because they usually come back—they would get two punches.

 

Using technology to increase loyalty 

In 2017, everything changed. I moved to a bigger location in Farmingdale, New York, added day spa services and upgraded our point-of-sale (POS) technology. I had already printed more punch cards with our new address, but then I discovered the advantages of shifting the program to our POS’s built-in loyalty platform.

 

One benefit of using this technology is that it automatically captures more information from each customer, including their name, phone number and email address. We rolled it out slowly. When someone came in with a card, we’d offer them the opportunity to transfer it to our automated system so they wouldn’t have to worry about always having it with them when they shopped. Plus, it was one less thing they would have to search for in their wallet.

 

If they had three punches, I’d put their information into the system and say, “Now you have four stars!” I remind people of how many stars they have every time I check them out. It’s a great way to say thank you for their business.

 

One of the best parts of the new system is that I now get analytic reports that tell me how many loyalty customers I’ve had in a given time period, and what percentage of my sales came from new customers. I keep the screen up all the time, so I can see that, say, I had 70 customers this week, and 42 of them are return customers.

 

How to reward loyal customers (beyond stars)

The cards and stars have helped me create an incredibly powerful bond with my customers, but on their own they wouldn’t be nearly as effective. They only work because of everything else we do for our customers to make them feel loved and appreciated, such as our refill program.

 

If you bring back your empty containers of scrub, you can refill them for about 30% less than the original price. I know that not everyone can afford a $30 jar of scrub, but if you can refill the jar forever for only $20, it really brings the cost down. And if they prepay for 10 refills, they get 13. That brings the cost of our products down to about the same as the wholesale price.

 

This isn’t a loss leader for me. I’m still making money. I’m just making less than I would be if they paid the full retail price, but it’s an important way for me to show my loyalty to my customers. Plus, when they come in for refills, they usually buy something else, and they bring their friends with them.

 

Another thing I do for our customers is that I stopped running sales five years ago. Instead, every year on the Friday before Black Friday, I have a buy-one-get-one promotion. Our customers wait all year for it, and, again, they bring their friends in for that, too.

 

I would say more than 30% of sales are driven and increased by our loyalty program. Our customers spend more when they come, to make sure they get their stars. It’s a way for them to get excited not only about the products themselves, but about the rewards they will get when they hit the 10-star threshold.

 

If you show your customers appreciation along with an understanding of their needs and goals, they will come back in droves. The loyalty program is just one example of how we do that.

 

Does your company have a loyalty program? Share your insights in the comments section below.

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