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Customer Retention and Loyalty Programs For Small Businesses

Customer Retention and Loyalty Programs For Small Businesses

March 17, 2022
Customer Retention and Loyalty Programs For Small Businesses

What’s the one thing that every mobile service business owner shares? The desire to get more customers. Customer retention is something that drives business owners across the country to improve their service, offer new products, and move into new markets.

It’s also something that keeps people up at night.

If you run a small service business, you probably wonder how to get more customers for your business, right? It may seem like a big challenge; but fear not, there are two tried-and-tested ways you can get more customers for your service business, and neither of them costs a dollar.

Read more to learn about the importance of customer retention and why you should establish a customer loyalty program for your small business.

What is a Customer Retention Program?

Small Business Customer Retention Program

A customer retention program is a common business practice used to turn new customers into recurring customers. Many popular customer retention programs leverage a loyalty program to reward customers for repeat purchases and recurring service requests. Some trade business owners also run referral programs to further reward loyal customers who send new clients their way.

However, the customer retention process doesn’t just start and end with a rewards program — there’s also a fair bit of data involved.

A successful customer retention program focuses on the business components that drive better customer acquisition, such as top-notch customer service, best local pricing, local status as an industry veteran, or even all of the above. A thorough understanding of which operational factors drive customer satisfaction and which weigh heavily on building loyalty will help secure higher customer retention rates.

Feedback is another crucial part of your customer retention program. When you request feedback, it not only encourages customers to stick around but also makes operational improvements and changes a lot simpler. With a strong customer loyalty program under your belt, you have the ability to become a true local leader in your service-based trade industry.

Why Is Customer Loyalty and Retention Important?

Customers are the most important aspect of any business. Without them, your service business would simply not exist. But while you probably recognize this, you may be failing to incentivize your customers to return to your business repeatedly. Sure, you do a good job and provide outstanding service, but are you going beyond the initial visit to secure a long-lasting customer relationship?

When it comes to getting more jobs for your business, a highly effective method is to incorporate the use of your loyal customers. Customer retention and loyalty programs generally help businesses owners increase overall customer lifetime value (CLV). This important business metric allows a company to better understand the amount of expected revenue to be brought in from a single customer over the course of the business relationship.

Benefits of Loyalty Programs For Small Businesses

Think about it for a second. Over the course of your business with these customers, you’ve provided them with a service they’re happy with and have, in many cases, made their lives easier by fixing a problem they used to have. But above all, you’ve built a relationship with them, and that’s a powerful thing.

For you to be a successful service business, you need to cultivate the relationships you already have and offer incentives to get them coming back to you again and again. Why waste time and effort chasing down new clients when you can turn your existing ones into repeat customers?

Enhance your existing customer relationships with incentives that prove your customers matter to you and that you are always looking out for ways to help improve their lives. Your past customers would probably jump at the opportunity to re-experience the joy of having their lives improved through your work.

However, without incentives, most people will lack the nudge they need to make another booking. You can re-engage your past customers, improve their lives, and promote brand loyalty by creating incentives. Learn more about what you can to do re-engage past customers

How do loyalty programs increase customer retention?

Customer loyalty programs have been shown to have a dramatic impact on customer behavior. In fact, consumer studies have shown that:

  • 81% of customers say they’re more likely to continue going back to a business with a loyalty program (2016 Bond Loyalty Report).
  • 73% of loyalty program members are more likely to recommend brands with good loyalty programs (2016 Bond Loyalty Report).

How would your business look if 81% of your past customers returned to you again and again, and if 73% of them recommended your company to their friends and family?

These strong statistics demonstrate the importance of customer loyalty programs and loyalty rewards. By establishing long-term customer relationships, it’s leaps and bounds easier to maintain high customer satisfaction rates all while securing new relationships referred to you by those who have already been impressed by your services.

How do loyalty programs benefit customers?

How Small Business Loyalty Programs Benefit Customers

When it comes to customer loyalty and retention programs, the trade business owners shouldn’t be the only ones who reap the benefits. Outside of the increased revenue and customer satisfaction that the business experiences, customers will also want to feel rewarded for brand loyalty and referral efforts.

Some of the most relevant incentives a customer will commonly encounter as part of a customer reward program include:

  • Markdowns for bulk or repeat services
  • Discounts and first access to new service offerings are ideal for testing how many customers in a local market may be interested in new services
  • Holiday sales and seasonal rebate programs
  • Individual packages and pricing tailored to unique customer needs
  • Opportunities to provide feedback and opinions that help shape the business

Deciding which customer benefits to include a rewards program offer boils down to the needs and abilities of your specific company. Offering too little can impact overall customer satisfaction whereas offering too much can weigh negatively on business revenue.

How to Increase Customer Retention with Loyalty Programs

Once you’ve realized that your most valuable assets are your current customers, it’s time to encourage customers to come back to your business again and again. Thankfully, retaining customers and getting someone to book you for your services a second time is much easier than getting them to do it in the first place.

To get repeat business, start offering your past customers one-off incentives that address their needs; they can’t refuse and still make good business sense for you. Once you’ve proven the worth of your business yet again, be sure to then share the details of your ongoing customer loyalty program and the additional incentives they can receive from future purchases and new customer referrals.

Best Customer Loyalty Programs for Small Business

Choosing the best customer loyalty program for your small business comes down to understanding what you are capable of offering and the specific business goals you possess. As previously mentioned, offering too much or too little through your customer loyalty program can be harmful to your business.

While offering too much may excite and entice a customer, the overwhelming cost of keeping up with such incentives can result in weakened finances and the inability to even profit off recurring work. On the other hand, offering too little may signal to clients that their worth isn’t very appreciated, weighing negatively on customer satisfaction and retention rates.

For small service-based businesses, it’s best to meet in the middle and offer a customer loyalty program with basic incentives a customer will appreciate. This can include percentage discounts on their next round of services or even a gift card to a local vendor for the successful referral of friends and family to your business.

Learn to also start appreciating feedback and leveraging historical data to make decisions on the best customer loyalty program incentives. Feedback is a key component, so consider implementing exit surveys as part of your marketing strategy.

How To Set Up A Small Business Loyalty Program

Once you have re-engaged your past clients with a new offer or by reaching out to them for their feedback, it’s time to reward customers for their loyalty and lock their business in for a lifetime. To do this, create a customer retention strategy with a customer loyalty program that truly rewards your best customers.

Building a great loyalty program that rewards your best customers doesn’t have to take a massive amount of effort. What’s more, the best loyalty programs are the ones that are easy to maintain but that provide an enormous amount of value and repeat business.

When you’re designing your loyalty program, think about these things:

  • Based on your knowledge of all your existing customers, what are their pain points?
  • How could you make life easier for your loyal customers? (Could you offer them free servicing every five years? Or free bonuses on bulk or repeat purchases?)
  • How can you show them they are valued?
  • How can you show them you care?

The best small business loyalty programs provide value for the business and the customer equally. When you’re coming up with your loyalty program design, consider successful loyalty programs used by other companies, and think about how you can apply their strategies to your business.

From beginning to end you’ll want to also ensure that your small business loyalty program works to benefit an individual throughout the entire customer journey.

Customer Loyalty Programs Examples

Across all industries, different companies offer a wide variety of customer loyalty programs to provide customer incentives of various sizes. Here are a couple of examples.

Virgin Atlantic’s Flying Club

Virgin Atlantic’s Flying Club is a perfect example of a great customer loyalty program. Their tiered rewards system lets loyal customers earn points every time they fly with them, and then redeem points by unlocking different rewards statuses.

We love this because it rewards customers at different levels based on their commitment to the company — the more committed, the better the experiential rewards will be. The tiered points system also creates competition and an element of status. Hence, customers feel a massive drive to make it to the next level and unlock more rewards (and a feeling of superiority).

Use a tiered loyalty system in your mobile services business by rewarding your customers with points every time they book with you. Tie dollars to points and create different levels of rewards and service perks so that your customers have an incentive to keep coming back and earning rewards.

Ferguson’s PRO Plus Loyalty Program

On a more industry-related level, let’s take a look at trade industry supply leader, Ferguson. From HVAC to plumbing, Ferguson is a national material and tool supplier that contractors commonly resort to across the country. Ferguson’s PRO Plus Loyalty Program offers excellent incentives for contractors of all types also using a point system that rewards users with each purchase.

With a wide variety of industry brands out there, Furgeson will routinely update bonus point promotions to provide contractors with extra points if they choose to purchase certain brand names. Once the contractor has banked enough points, they can then redeem them for customer incentives including tools, fun experiences, and even the chance to donate to a cause.

Because of a contractor’s routine need to restock various supplies and tools, the PRO Plus Loyalty Program is an excellent example of how a customer loyalty program can be used to lock in and secure a long-term customer relationship. With the drive to build points while making necessary business purchases, the convenience of this loyalty program significantly benefits both sides of the operation.

Streamline Your Customer Retention and Loyalty Programs With FieldPulse’s CRM

customer management software

Getting more customers for your business may seem like a challenging task, but you can make it happen with careful planning, incentives, rewards, and dedication. The critical thing to remember is that you must provide a huge amount of value whichever way you choose to incentivize and reward your customers. Without value, your customers will not see the benefit of coming back to you and your business again and again.

When developing and implementing your customer retention and loyalty programs, you’ll need the right tools to organize and monitor customer data and the various incentives provided for an enhanced customer experience. With FieldPulse’s robust capabilities, customer management is easy via convenient communication tools, contact information management tools, and booking capabilities.

To learn more on how FieldPulse Can streamline your customer retention and loyalty program, request a personalized demo or start your free trial today!

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