How to Create Loyalty Programs that Drive Customer Retention

 While you should always do what you can to acquire new customers, retaining the ones you already have is just as, if not more, important. Did you know that a customer who’s previously made a purchase at your bakery is 60% more likely to make another purchase in the future? Not to mention, recruiting new customers costs 5x as much as retaining current customers. Not exactly ideal! 

So, what’s one way to keep customers coming back for more? Loyalty. It’s what you hope to get from your paying customers, but what about giving loyalty in return? As a bakery, a well-thought-out customer loyalty program can help drive customers to your store while cultivating a new and loyal base of consumers.

Keep reading to learn how you can easily and effectively create a customer loyalty program at your bakery.

First Things First: Answering the Right Questions

As you’re thinking about designing your bakery’s loyalty program, you’ll want to create it with your best customers in mind. Of course, you’ll want everyone to participate, but thinking about the habits of your most frequent or highest-paying customers can help you guide other customers to consume in the same ways. Think about how much those customers are spending on average. How often do they come to your bakery? Observing your customers’ spending habits will tell you almost everything you need to know.

Not only do you need to understand your customers, but you should have a good idea of what’s most valuable to your bakery. Ask yourself: Would you rather work to increase the number of visits each customer makes, or would you rather increase the dollar amount spent in one visit? Once you have a feel for what you’re trying to accomplish, you can move on to creating the program specific to your goals.

Man looking a bread in a bakery window

Keep It Simple & Sustainable

It’s important to note that, to succeed, a loyalty program needs to be both simple and straightforward for both customers and employees. If your loyalty program is too complex, your customers may become uninterested or intimidated, and your employees may stop promoting the program to avoid the frustration of trying to figure it out. 

Ensure that the sign-up process for the loyalty program is simple and quick. Usually, to create an account, all the customer needs to provide is their name and either their email address or phone number. This information is just enough to keep in contact with your customers without feeling invasive. 

A sustainable loyalty program is straightforward. The loyalty deal: “Buy two cupcakes, get the third one free,” is more accessible than requiring multiple purchases, a specific date range, and certain conditions to get the reward. Here are some loyalty program ideas to consider:

The Point System

One of the most popular loyalty programs is the point system. For example, we offer bakeries a customer loyalty program that either assigns a point for each dollar spent or a set amount of points per visit. 

A point system is fairly simple to implement—as long as you know at what level of points customers will receive rewards and what those rewards are. Obviously, there is a balance between the two. You can’t set your goal too high and offer a reward that doesn’t match the amount of money or effort the customers have spent. 

If your bakery decides to use a point system, here are a few extra ways you can customize it:

  • Use a tiered reward system to encourage customers to spend just a little more to get to the next point level. For example, if a customer spends between $5-$10, they receive 10 points, but if they spend between $11-$20, they’ll receive 20 points.
  • Offer double points during your ordinarily slow period. This could be a time of day, day of the week, or a combination of the two (ex: Tuesdays from 1:00-4:00 pm). This time frame is typically known as “happy hour,” but try coming up with your own deal name that’s specific to your business. 
  • Integrate points with your bakery’s email marketing. If a customer hasn’t come in for a while, shoot them an email to entice them with points if they come in soon.

The Punch Card

If you’re a bakery trying to increase the number of customer visits, a loyalty punch card may be your best bet. This type of loyalty program offers a free item after a certain number of purchases or visits, like a “buy ten and get the next one free” kind of deal. 

A loyalty punch card for your bakery could go towards anything you sell: loaves of bread, cupcakes, cheesecakes—you name it. If you can, try to implement a digital card that customers can keep on their smartphones. People tend to forget or misplace physical cards, so they might decide not to participate at all. Having a loyalty program set up on a device that pretty much everyone already carries around may prove more convenient and attractive to your customers.

Bakery worker at register

Reward a Variety of Actions, Not Just Purchases

Don’t forget: You can reward your customers for anything you want. Get creative with it! While you definitely want to reward customers for spending money in your bakery, you can also provide rewards for their general support as well. Consider rewarding your customers for:

  • Signing up for your newsletter 
  • Following your bakery on social media
  • Posting about and tagging your bakery on social media
  • Ordering a novelty item (like a wedding cake or custom order)
  • Referring another customer to your bakery

Offer Rewards Customers Will Actually Want

No matter what kind of loyalty program you use, ensure the rewards are worth it to your customers. Return the loyalty by ensuring your customers are set up with what feels like VIP treatment. The fact is, you probably won’t get very many participants if they need a thousand points to get something as anticlimactic as a small cup of coffee (even if your coffee is out of this world). 

In addition to offering rewards people will actually want and or use, remember to offer excellent customer service too. No matter how great the rewards are, if the customer does not feel valued, respected, or taken care of at your bakery, they will most likely not be returning. Implement proper staff training to ensure that every employee working at your bakery gives your customers a positive, memorable experience. 

A loyalty program should be fun for customers. Once they’ve spent $100, maybe they get a free dozen donuts. Or if they post about your bakery on Instagram, they’ll receive a 15% off coupon. Better yet, loyalty programs don’t have to just revolve around your baked goods. You can allow your loyal customers to unlock things like discounted merchandise, baking classes, or anything else your bakery has to offer (as long as the reward matches the amount of money or effort spent.)

Partner With Other Businesses For Compelling Rewards

A great way to offer attainable and desirable rewards is to look externally at local businesses you could potentially partner with. Please note: this works best with non-competitors that don’t share your same customer base. Maybe there’s a party supply store down the street you could pair up with. If a customer spends a certain amount of money (or earns a certain amount of points) at your bakery, they receive a discount at the party supply store—or vice versa.  

Since your bakery and the party store don’t sell the same items, but parties and baked goods often go hand-in-hand, there’s a pretty good chance that the same people would be visiting both. By partnering with others, you can create an offer that benefits your bakery, partner, as well as your shared customers.

Promote Your Program

After you’ve established your customer loyalty program, you need to make sure people know about it. Treat your new loyalty program like a special or product you’d promote, and create a marketing campaign around it. You can:

  • Send out email announcements before, during, and after the program’s launch to build interest
  • Set out signs at your store locations
  • Create a page on your website
  • Include promotional messages on social media
  • Incentivize signing up with 10 points right off that bat, a 15% off coupon, or a free baked good

Customer loyalty is an incredibly important aspect of your business’s sales, reputation, and overall success. Your bakery’s customer loyalty program could be as simple as a card and specialized stamp, or you could go high-tech and use an online platform. Whatever makes sense for you and your customers, you can be sure that an effective loyalty program will turn infrequent customers into loyal ones.

Already have a great customer loyalty program, but need help managing your bakery operations? Schedule a demo with BakeSmart today to learn how to conquer the chaos.

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