This question could be answered in so many ways:
Pros of a loyalty program:
- small business can encourage customer loyalty without giving away the farm in a Groupon/LivingSocial deal
- encourages consumers to shop local
- if you're a go getter, it can be easy to get started by simply going to the businesses in your neighbourhood to get them started. Most will reject you but you don't need everyone, just need to get a few on board to start with
- there could be a lot of setup involved. Are you building an app or backend system for consumers and businesses to use?
- there is a lot of competition in the loyalty program space right now (LoyalTree, Belly, Vicinity, just to name a few) how are you going to separate yourself from the rest?
Starting the business is the easy part, you just have to make the decision to start. But in order to be successful, a loyalty program needs 2 things: businesses to give rewards and lots of consumers using the app/system. That can take time to build and manage.
1. You can simply start.
•pros: you have a quick start, no chance of over planning or over cautiousness.
•cons: best suited for people who are very well in tune with their target audience and poses excellent business acumen (and probably a great deal of luck)
2. You can do all the hard work, prepare for everything, conduct a proper market analysis, read books to acquire important knowledge you lack form a solid strategy including a worst case scenario exit plan.
•pros: you are well prepared for most situations.
•cons: it takes a lot of time and effort.
3. Anything in between the first two options.
•pros: it takes less time and effort than option 2.
•cons: you are less prepared than option 1 and the less effort you spend the more luck you will need to succeed.
Start with what actions and who you want to reward.
Also determine what benefit you will receive from those who participate.
Create software to accomplish the program
Do you want help?
The short answer is by being an experienced expert.
"How" is the very first per-requisite knowledge before starting any business. If you are not an expert on loyalty programs, don't even think about starting one yet. You can read all you want but ext book knowledge is seldom enough. Get a job working for a successful loyalty program and learn the details first hand. Talk to employees in every department and pick their brains on all aspects of what they do.
How to go about building a start up should be a significant part of your competitive advantage and if you don't think you know the answer better than all laymen and most companies already in the business, you are not ready and starting the venture is not a good idea.
If I did i would be a rep for the Worlds largest - Lyoness. Id use what they have created and market it. Contact me and I will send you a complimentary membership, Byron Bitcoin Facebook
If you want to start the loyalty program, you should be running a business already because this is the reward that you give to your customers for buying your products or utilising your service.
The advantage is that of customer loyalty and increased sales, but you need to do a thorough research before implementation.
Loyalty should come from a business that makes or offers quality products and services, and the loyalty program should come based upon the customer's willingness to keep using your service or products...Loyalty from my view cannot be bought or purchased...Loyalty programs are based upon trusting relationships...
You need good business plan, and good business consultant.
I agree with Sagheer and totally disagree with David. Please check out my website or at LinkedIn and let me know if you think I can be of service. I can not post my website here, but you can get it from LinkedIn.
Segment your clients by spending, and give them respective taylored incentives from time to time or when you have a product launch that matches products their main purchases(further segmentation), I have seen this work very well in eCommerce retail.
I have FREE Practical Accounting templates for individuals to use that can be downloaded from my website. The templates include; Business Plan, Chart of Accounts, Balance Sheet, & Profit and Loss Statement. Through my consulting services I maintain suggestions for the small business owner/manager and assure them that their information is maintained completely private. Showing the owner/manager the importance of practical accounting and gaining the expertise to read their own Financial Statements to present their company properly to both lenders and investors.
Hi Safraz. Please could you tell us a bit more about why you're thinking about going into this business and what you hope to achieve from it? That way the community can give you more useful feedback. Cheers, David
If you are asking this question, you don't know what's specifically involved so, my advice is:
Don't do it.