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How to introduce a customer loyalty program for your cafe

How to introduce a customer loyalty program for your cafe
Loyalty programs are a great way of rewarding customers for their ongoing business.

If you’re a cafe looking to introduce a loyalty program, here are a few tips to consider before you do.

Australia-specific insights

There’s no doubt that customer loyalty programs are popular in Australia. Some 84 per cent of Australians were enrolled in at least one loyalty program in 2015, according to The Loyalty Point’s 2015 consumer research study ‘For Love or Money’.

The survey suggests there are also clear benefits for businesses. Around 82 per cent of members said they tend to buy more from companies if they are members of their loyalty program, while 55 per cent said when choosing between two similar companies they tend to buy from the business that has a loyalty program.

Members are also aware of why businesses offer loyalty programs. The three top reasons identified by survey participants were: to keep me buying from your business over your competitors (68 per cent); to encourage me to buy from your business more often (67 per cent); and to encourage me to spend more with you (63 per cent).

What to consider when implementing a loyalty program

The best customer loyalty programs for small businesses are cost effective, efficient and simple to implement and manage. Customer-wise, they should offer some kind of reward or incentive and be easy to use.

Before you implement a loyalty program, consider the nature and pace of your cafe and offering, your clientele and what your key objectives are in introducing one. Visit other cafes, talk to business owners and ask your regular customers about what they would like to receive from a loyalty program. Explore what loyalty programs are available on the market or as part of your current Point of Sale (POS) suite of services. It’s also important that the incentives offered to customers are appealing enough to them, but cost efficient enough for your business to ensure a return on investment.

For example, a coffee cart that is incredibly busy during morning rush hour, with customers buying takeaway coffee, could opt for a quick easy card-based program. If a key objective is to keep customers coming back, this could simply be a paper card that is stamped or clipped with every purchase. For example, for every 10 coffees a customer buys, they receive the 11th free.

Alternatively, if your cafe is a larger operation that serves coffee and food all day, you might want to consider implementing a points-based program. Every dollar spent could equate to a certain number of points (i.e. $1 equates to one point). Once a customer reaches a set number of points they are rewarded, for example, with a free coffee or a pre-determined discount to a set value. These types of programs can be offered through an app, or using cards that have accompanying customer accounts/profiles.

Make it worthwhile

A customer loyalty program will only deliver long term value if you commit to it. Market it in-store, on your business website and social media properties. Email customers with member profiles special offers and deals to entice and reward them. Encourage staff to ask every customer if they are members – then sign up those that aren’t and process the transactions of those that are.

Lessons to note

The Loyalty Point survey found that members rated the best benefits of loyalty programs as being 1) immediate price discounts when making purchases  (78 per cent) and 2) point based programs that allow members to redeem ‘points’ for vouchers, products or other rewards (77 per cent). They listed the major reason for leaving a customer loyalty program as not earning enough points or rewards fast enough (59 per cent).

If you’d like to invest in a customer loyalty program and need some funds to help you do it, speak to Prospa about a small business loan.

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The information in this post is provided for general information only and does not take into account your personal situation. Nothing contained in this post constitutes advice or an endorsement or recommendation of any kind by Prospa. Any links to third party websites are strictly for informational purposes only. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

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