Keeping customers, so that they come to like you and stay loyal, is a large part of what makes a business succeed. Regular customers spend more, come back more often, and act as a voice that advertises your business for you. But what is it that keeps your customers with you? Beyond a quality product and service worth remembering, there are ways to encourage customers to come back again.
Investing in your customers in order to retain your customer base is important. Studies have found that winning a new customer costs four to five times as much as keeping an existing one — as much as seven times in some cases. That statistic makes it very clear how much good a tool that sustains a long-term relationship between a business and its customers can do, and how much more effective it can make your business.
What is a customer loyalty programme?
A customer loyalty programme is a system that rewards customers who keep coming back to your business. Its aim is not complicated: to hold on to your customer base and increase your profit.
Picture two new cafés that have opened near each other. They look much the same and their prices are much the same, but one runs a buy-ten-get-one-free promotion and the other does not. Which would you rather go to? Most people would say the one with the free drink — particularly when times are as hard as they are now.
The psychology behind it
Research has shown that loyalty programmes really work by drawing on deep-seated human psychology, so that customers cannot resist the pull. A loyalty programme stimulates the nervous system to release dopamine when a reward brings satisfaction. Once the reward arrives, the pleasure that comes with it encourages the same behaviour again — and that is what brings customers back more often.
Let us look more closely at the key factors that influence consumers.
1. Turning buying into a habit
A loyalty programme keeps customer demand alive by rewarding purchase after purchase, and that repetition turns buying into a habit. You can push the behaviour further still with social media activity or a refer-a-friend programme, so that your customers help advertise the business as well.
Sephora's Beauty Insider Rewards programme is a good example of habit-forming behaviour. Customers earn one point for every dollar they spend, and the more points they gather, the more appealing the benefits become. Points can be redeemed for sample sizes or for full-size products.
This is how Sephora turns buying into a habit: customers set out deliberately to collect points so they can redeem a reward. Seeing the points total also nudges them into buying again. And when the business runs a special campaign on top of that — seasonal rewards, say, or a bonus-points promotion — it can encourage customers to spend more still.
2. Creating the motivation to earn a reward
Use gamification to make a loyalty programme more interesting. Borrow the mechanics of a video game — tiers, levels, missions — to show progress and how close the next reward is, whether that reward is something free, a discount or a promotion. Bringing a sense of play into it makes the customer's experience more exciting, and builds anticipation, and scientific research shows that simply anticipating a reward can trigger a release of dopamine in the brain much like the one that comes with actually achieving something.
A familiar example is Starbucks Rewards, which shows rewards through the app as a visual set of tiers. That makes customers feel as though they are in an enjoyable competition, which builds loyalty and holds the customer base together nicely.
3. Belonging to a group
People are social animals by nature, and loyalty programmes draw on that basic need. When you create a membership scheme or a special group for your customers, you give them the feeling of belonging to something, with some standing among the other members. Imagine a customer choosing between being an ordinary customer and a VIP one — which would they rather be? Building a loyalty programme with tiers is, in the same way, a technique for creating a positive relationship.
Airline mileage programmes are another example. Customers who collect miles and reach a higher tier unlock special benefits such as priority boarding, lounge access and free upgrades. These privileges foster a sense of belonging to an exclusive club, reinforce loyalty, and give customers a reason to choose that airline more often.
4. The principle of loss aversion
People generally dislike losing something more than they enjoy gaining it, and loyalty programmes put that to use: if we do not take part, we "lose" out on things, which is a shame. Other regrets play their part too — points that will expire, a promotion running out, a reward that might be missed — and all of it creates a sense of FOMO, the fear of missing out.
5. Loyalty programmes are easy with Qashier
Qashier understands just how much regular customers matter. That is why we built a POS system with features that support your business, loyalty points among them. Using it is straightforward: the customer signs up as a member, and then, when they buy something, you enter their mobile number and their points are added straight away.
What is more, using the membership scheme alongside the points system lets you look back over a member's transaction history. There are other features that support your sales too, whether you are selling packages, courses or stored credit to your customers — which makes the Qashier POS a shop management system for every kind of business, from food and drink to retail and beauty.
In summary
A loyalty programme is more than a discount. It is a programme that ties you to your customers, keeps them engaged with the brand over the long term, gives you regulars, and helps your business flourish.
Start raising the standard of your shop with Qashier today
If you would like Qashier to be the assistant your restaurant business relies on, get in touch for more information. We are ready to support you, whether that means a POS for restaurants or for retail shops, an effective POS system, and support from our team seven days a week.
For more details, reach us on LINE Official: @qashier.th or call 02 544 0267