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Should small businesses offer loyalty schemes?

Should small businesses offer loyalty schemes?

Posted 07th February, 2019 by Aidan

As a small to medium business, you might think that loyalty schemes are only for the big brands. You might look at the likes of Boots, for example. The chemist offers one of the biggest loyalty schemes in the country, but it cost £30 million to set up. Tesco, meanwhile, is thought to have invested more than £1 billion into its Clubcard scheme since it was set up in 1995.

The truth is, though, you don’t need a Boots-sized bank balance to be able to set up a loyalty scheme for your customers. Here’s our guide to the benefits of establishing a loyalty programme and ideas for how to do it on a shoestring.

What the stats say about the importance of customer loyalty

Research suggests that it costs a business five times as much to attract new customers as it does to keep existing ones. Despite this, the stats show that 44 per cent of companies still place a greater emphasis on acquisition than they do retention.

Need a few more figures to make up your mind about the value of customer loyalty?

It’s thought that the probability of selling to an existing customer is 60 to 70 per cent, while the chances of selling to a new customer is just five to 20 per cent.

Still not completely convinced?

Studies suggest that existing customers spend an average of 31 per cent more than new customers.

Plus, increasing customer retention rates by five cents has been shown to increase company profits by 25 per cent.

How can businesses benefit from offering a loyalty scheme?

So, the stats show that customer loyalty can have a powerful impact on a business’s success. Of course, there are many methods around that help companies retain customers.

What specific role can a loyalty scheme play?

The Bond Brand Loyalty Study recently revealed just how persuasive a customer loyalty scheme can be. It concluded:

  • 81 per cent of consumers agree that loyalty programs make them more likely to continue doing business with a brand.
  • 67 per cent of consumers modify the brands they purchase to maximize the benefits they earn.
  • 73 per cent of people in loyalty schemes are more likely to recommend and say good things about brands with good loyalty programs.

What options do small businesses have for setting up loyalty schemes?

According to the Bond Brand Loyalty Report, the best loyalty schemes are those that:

  • Don’t require much effort for customers to participate in
  • Offer appealing benefits to the customer
  • Make customers feel like they enjoy being part of the programme

The above can be achieved in several ways. Here are a few:

Points schemes

Based on the principle of spend more, get more, points schemes are used by big brands like Tesco and Boots. To set them up businesses usually give customers a points card and every time they make a purchase in-store or online, they earn a certain amount of points and these points translate into a reward once they have collected enough.

Perks schemes

Again, businesses that offer perk schemes tend to give their customers physical loyalty cards that they can use every time they make a purchase. Companies then reward customers with treats such as invites to VIP opening nights, pre-sale codes, birthday deals, deals on delivery options, and early-bird looks at new products.

Stamp cards

These are arguably the easiest form of reward scheme to set up if you’re a small business. It simply involves giving the customer a card and they get a stamp on every time they buy something like a cup of coffee or a book in-store. When they have filled the card with stamps, they are entitled to claim a free coffee or book etc.

How does a small business implement a loyalty scheme?

Setting up a stamp card scheme is relatively easy – only requiring you to invest in the credit card-sized stamp collection cards and a few stamps.

If you want to set up a points or perks scheme, there are a few bits of tech out there that can help.


Swipii allows customers to earn points while using their every-day credit or debit card in-store. The platform is suitable for use by all sorts of businesses – from coffee shops to retailers. To set up their loyalty schemes, businesses just need to create a Swipii account online, customise how they want their business to appear inside the Swipii app, and chose what rewards they want to offer – for example, a free coffee for every 130 points earned.

Customers who sign up, meanwhile, get access to an app that they can use to manage their accounts. The cost to businesses is a tiny £19 per month and the set-up time is less than four weeks.


With Loyalzoo businesses can enrol customers into their loyalty schemes at the point of sale using their phone numbers and email addresses. Points are automatically delivered to them by text message or email. Once customers are signed up companies can also send them messages containing special offers and other perks.

The app also segments customers into ‘new’, ‘VIP’ and ‘slipping away’ categories so businesses can target each customer with the right deals and offers. Loyalzoo costs £19 a month for the basic package and prices rise to £60 a month.


Reward-It allows businesses to set up points-based loyalty schemes. Customers can be signed up for loyalty schemes in store or through self-registration online and can then control their accounts via an app.

The software also includes automatic trigger messaging based on factors like birthdays and reaching a certain points balance. Companies can also create their own personalised messages based on customer profiles. Prices start at £299 for set-up and then £45 a month after that.

Categories: Tips, Marketing, Small Businesses

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