In the case of small enterprises, one of the most important pillars of success is customer retention. It is far less costly to ensure that customers keep on returning to do business with them rather than trying to win new customers all the time. A well-executed incentive program can go a long way in enhancing customer loyalty and increasing sales. However, for most small businesses, cash is always in short supply, thus making it difficult to come up with one or two memorable yet cheap customer incentives. However, the right tactics allow small businesses to run successful customer incentive programs at a very low cost.
This blog will review some of the most effective customer incentive strategies that small-scale businesses can use and implement, thanks to innovative solutions like Kennect incentive solutions which can help enhance the efficiency of their processes.
The Importance of Customer Incentives for Small Businesses
As we all know, customer incentives cannot solely be put into the box of discounts and offers rather they are more about establishing a bond with the customers that will push them to come back. It is a demonstration to the customers that the business cares for them which in turn results in loyalty and hence high lifetime values. This is even more relevant in a small business set-up, which would usually depend on strong community ties and repeat customers.
Citing a report issued by the Harvard Business Review, more resources and money are spent on acquiring a customer than retaining one which can be five to 25 times different. In addition, a study found that increasing the customer retention rates even by simply 5% would lead to an increase in profits ranging from 25% to 95%. Therefore, it is evident that customer incentives are not only an expense but rather a case of putting in the resources for the bettering of the business in the years to come.
Affordable and Impactful Customer Incentive Strategies
1. Loyalty Programs: Encouraging Repeat Purchases
One of the most common and salient means of encouraging customers to spend more is the loyalty program. These are aimed at rewarding customers for their continuous patronage and promoting their loyalty to the company. For example, small businesses may implement a very basic points-based system where customers earn rewards with every purchased item. When, however, a consumer accumulates a certain amount of points, they can redeem them for a discount or a complimentary item.
The Bond Brand Loyalty report cited that 73% of the respondents are inclined to recommend a specific brand if there is an effective loyalty program in place. Furthermore, 81% of the respondents indicate that they are more likely to do business with a company where a loyalty program exists.
For small enterprises, it is possible to keep demands within control by offering rewards with no or very minimal discounts. For instance, invites for exclusive early access to products, offering tailored suggestions, or provision of collectables can work better than monetary benefits.
2. Referral Programs: Leveraging Word-of-Mouth Marketing
Small companies can benefit from their consumers putting substantial investment into promotion through referral programs them ‘brand ambassadors’. Such programs typically provide an incentive for both the customer making the referral and the customer who is being referred. This allows the business to expand its customer base without multi-plier level marketing. Referral programme is low cost and does not require a lot of advertising as it relies on word of mouth which is the oldest and the most reliable form of advertising.
According to a Nielsen report, 92% of people believe in what their friends and family say about a product rather than any other advertisement. To enhance this tactic, small businesses can reward the customer referring with a small promotional discount, a gift card, or a product of no charge which is ideal for referrals.
Everything has its pros and cons and implementing referral programs is not an exception. Referral programs can be easily handled and made seamless using tools like Kennect incentive solutions. With Kennect’s software, businesses can reward customers and monitor their activity to segregate those who participate in the referral program, thus making sure that the referral program is beneficial and convenient for everyone.
3. Exclusive Discounts and Promotions: Creating a Sense of Urgency
A good offer is always welcome and thus a well-planned limited-time offer can result in spiking up sales. Though this applies to all, small businesses need to be careful not to go overboard with prices. Giving too much or irrelevant discounts may stereotype even the best product while lacking them may unfairly prejudge the customers.
The trick is to embrace discounts and to make sure they do not lose their worth. Other than that, it may be possible to implement a rule that suggests discount measures only to remaining customers or if any, members of a loyalty program. On the other hand, seasonal e.g. Christmas discounts may be employed to achieve the same meaning but that goes with a lot of time restraint.
RetailMeNot has shown that 80% of consumers are more likely to purchase something for the first time from a brand that has a sales promotion such as a discount. This promotes business since they can sell more to existing customers while keeping costs down as they offer exclusive benefits to these customers.
4. Personalized Offers: Tailoring Incentives to Individual Customers
The core of any small business is the ability of the owner to personalize. Each time offers and incentives are customized to one or a few customer segments, businesses can connect with the customers on a more profound level. This can range from a simple happy birthday message with a discount, recommending a product to a customer based on their previous buying behaviour, or thanking a customer and including a promotion in the email.
Epsilon found in a prospective study that 80 per cent of consumers are inclined to make a purchase when brands adapt personalized strategies. For instance, small businesses have data from customers that can enhance the client’s experience with personalized offers making the client feel special.
Kennect incentive solutions can assist organizations in controlling these personalized offers by monitoring end users’ preferences and purchase history. The manageable offers to be personalized lapses can be automated and better administered as applications provide small-scale business to use the Kendesk platform to help them administer personalized interventions.
5. Free Samples and Product Trials: Building Trust and Engagement
The practice of providing free samples or allowing trial periods may highly appeal to potential buyers looking to try out new offerings at no or low purchasing cost. It is especially true for products and services offered by such businesses’ segments, as cosmetics, food and technology for example offer.
Providing free samples is an additional service to a customer, allowing him/her to assess the quality of the product. A survey conducted by Sampling Effectiveness Advisors found that 92% of end users who received a free sample would later go on and buy that product.
Small-scale entrepreneurs can run such campaigns as offering samples to faithful customers as a build-up for another bigger promotion or as a sign of appreciation for support received over the years. This tactic can also be used in line with the provision of strategist services to the customers to improve the service experience.
6. Social Media Contests: Engaging Customers Online
In the present world, especially with the growing use of the internet and social media, social media contesting has increasingly become an inexpensive way of involving customers and enhancing brand exposure. Giving customers the chance to win something for entry into a social media competition or giveaway helps even passive consumers to become active and help their businesses promote themselves by sharing their experiences with their contacts.
For instance, an example of this is in the case of small businesses that may request customers to upload their pictures using the product, mention the business and also link a particular hashtag. In exchange, such participants will be put into a raffle where there are chances of winning a prize which could be a gift card or a promotional item. Such social media competitions increase the level of interaction with the audience and the presence of the brand and even encourage the creation of content by the audience itself while being at a very low cost.
With the help of platforms such as the Kennect incentive solutions, for instance, entering competitions, the participation of the members, and reaching of the last prize for the deserved ones is easy.
Leveraging Kennect Incentive Solutions for Small Business Success
As it has been pointed out in several places in this blog, the actual set-up of an incentive program that works will not be quite easy but as such solutions such as Kennect incentive solutions take the burden out of the whole process. Whether it is a loyalty program a referral program, or even a personalized incentive offer, there is always the inner workings of Kennect to ensure that these efforts are automated, monitored and even improved.
Kennect is dedicated to helping small enterprises grow their incentive schemes without the need to invest in many systems. Here’s how it can help:
- Automation: The incentives are managed by Kennect software which ensures that the rewards are given on time and minimizes the management responsibility of small business owners.
- Customization: The users of the platform can design custom offers, bonuses, and even experiences for every customer depending on their characteristics and behaviour.
- Tracking and Reporting: The company allows observing the behaviour and performance of elements in the incentive plan in real-time statistics and reports so that the business can adjust the plan for better results.
Conclusion
Contrary to popular opinion, customer incentives can be very beneficial to small businesses as they help in building sales, constructing loyalty and establishing long-term relationships with customers. Small businesses can encourage their customer base easily even on a restrictive budget, by employing low-cost but effective methods like loyalty schemes, referring friends, giving discounts, making personalized offers and running competitions on social media.
The use of Kennect incentive solutions, for instance, can help to implement these methods more effectively in that it provides the system, the process, and the information required to run the incentive scheme effectively. In the modern economy, especially with increased competition, one of the strategies that can be advanced for customer expansion in a small business is having a good sense of customer incentive plan and good execution of it.
