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BFS Capital Blog

Technology Drives New Loyalty Programs for Small Business

May 10, 2017

Hear ‘loyalty programs’ and we all think of big brands, like airlines, credit cards, and national retail chains. But, as the San Francisco Chronicle recently reported, several start-up companies are now offering sophisticated loyalty programs specifically for small businesses.

These companies include FiveStars, Perkville, SpotOn and Belly. And other, more well-known names, like Foursquare, Yelp and Facebook, have made some moves into the small business loyalty space.

Up until now, small businesses have tried simple programs like punch cards simply because anything more extensive has been cost-prohibitive. But, these new offerings enable small businesses to learn more about their existing customers, market to them and reward the most loyal. Costs range from $29 to more than $150 a month.

One of the big questions, it would seem, would be whether consumers are on loyalty-program overload. Recent studies say that the average U.S. household has signed up for 18 loyalty programs but actively use only eight. Fewer than half of customers surveyed by Forrester felt that loyalty programs save them money. Only 26 percent said that loyalty programs influence what they buy, and just 22 percent said that loyalty programs influence how much they spend.

But the small business programs may be able to engage customers more given the new ways they’re able to harness technology, like mobile and the cloud storage, and the fact that consumers can earn rewards across multiple businesses.

Yahoo Small Business Advisor contributor Jodi Beuder provides another perspective in Is Your Customer Loyalty Program Following the Trend? She contends that loyalty programs are a part of providing excellent customer service and cites several progressive ideas from larger brands, like Patagonia. Punchh, a software company, has created a virtual punch card (solving the problem of plastic card burnout!) and rewards customers not only for their business but also for things like referrals and social media reviews.

Beuder says businesses implementing any kind of loyalty program can learn from these and other successful programs that have some common underpinnings. These include a focus on the customer experience, not just their purchase; a variety of ways for customers to earn rewards; and ease and simplicity.

A great resource is an article on the SBA’s website called 7 Tips for Starting a Successful Customer Loyalty Program. This article covers information from the most basic—a punch card program—to other options like opt-in programs and premium programs. Across the board, thorough planning, good execution, ongoing monitoring and measurement will help ensure the success of your program. Also included in the advice for launching a program: Be sure to include digital components, choose your incentives carefully, and communicate regularly with members.

Last but not least, business writer Heather Clancy offers some excellent insight on small business loyalty programs. The new wave of loyalty programs designed specifically for small businesses, Clancy says, embodies one of the hottest trends emerging this year: the intersection of customer relationship management (CRM) and mobile payments. These new programs offer modules that enable business owners to customize or personalize offers for repeat customers or those with high repeat potential. She cites Swipely and CARDFREE as programs to watch, along with four others:

Affinity Solutions
Belly (also mentioned above)

Take some time to read more here. Not only is this information every small business owner should know, but there are also great visuals and screenshots that provide tangible examples of how the programs actually work.

Image courtesy of Stuart Miles /