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The Small Business Online Marketing Handbook: Converting Online Conversations to Offline Sales by Annie Tsai

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Chapter 9

Design an Effective Customer Rewards Program

Customer rewards programs are a great way for small businesses to zero in on the behaviors that drive mutual success for both you and your most loyal customers. And because the rewards that drive the most activity tend to change over time, don't be afraid to change things up once in a while and test your program benefits. You have to begin, however, by determining what you want to happen with this kind of customer interaction.

Understanding Your Goals

Before you start designing your rewards program, first consider the outcomes you're trying to drive. Most customer rewards programs typically have one or more of the following goals:

  • Drive repeat business.
  • Drive new product usage during future visits to broaden the scope of customer spending.
  • Drive higher per-visit spending.

If this is the first time you've designed a rewards program, we recommend that you select no more than two goals so that you don't lose focus. Newer businesses are likely looking to encourage repeat business or get existing customers to try new products with each visit. A more mature business with a fairly well-established customer base is probably seeking to build a strong referral system or encourage higher per-visit spending with your existing loyalists. Because our focus is on those who are just getting started in this realm, we'll spend the remainder of this chapter discussing how new businesses can design a rewards program to bring in repeat customers. ...

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