5 marketing strategies to boost customer loyalty for small businesses

loyalty marketing strategies for small businesses instamojo
(Last Updated On: July 13, 2022)

Are your customers loyal?

Loyalty marketing strategies for small businesses involves simple tips and tricks that allow you to keep your customers happy with your brand. Your customers expect more from your brand the longer they stick around, so it is important to live up to their expectations and offer more than just your products.

Small businesses tend to focus on lead generation and increasing sales through SEO optimisation. But, this comes useful only for new customers.

A more sustainable marketing strategy is keeping your existing and loyal customers happy- and that’s where loyalty marketing comes in.

54% of B2B marketers said making customers more loyal was a leading business challenge, a 10% increase from the previous year “ – B2B International 

What is loyalty marketing?

Loyalty marketing is a type of marketing strategy that focuses on growing and retaining existing customers with different incentives. Using the right loyalty marketing strategies for small businesses encourages customers to do repeat business with your company and keeps them loyal in the long run.

Your loyal customers should not be coaxed into buying more of your products, instead, reward them with perks and incentives for boosting your business.

Benefits of loyalty marketing for small businesses

Loyalty marketing for small businesses must focus mainly on retaining existing and past customers with initiatives and incentives. This will help you increase sales, stand out and develop a stronger relationship with customers. As a bonus, it will pique new customers interest too. Some of the benefits of loyalty marketing for small businesses are:

1. Selling new products to existing customers is easier:

Companies are 60% more likely to sell to their existing customers than to new customers. This is because it is simpler, cheaper and existing customers already know what your brand is about.

2. Cheaper to retain customers than acquire new ones:

The cost of acquiring a new customer is five times more than retaining an existing customer. Existing customers are just looking for a good deal, and you spend little to nothing on educating them about your brand.

According to Forrester, it costs 5 times more to acquire a customer than to retain and enrich customers. With the right loyalty marketing strategies, you’ll be able to achieve better retention rates.

3. Improves overall SEO strategy:

SEO and loyalty marketing is the ‘salt and pepper’ of a company’s marketing mix. Over 70% of consumers say they need to make a minimum of 3 purchases to feel ‘loyal’ to their brand. By encouraging and leading customers to return over and over using SEO and measuring the level of loyalty from SEO targets can create the right behaviour to increase customer loyalty.

loyalty marketing strategies for small businesses - instamojo
Source: searchenginejournal

4. One step ahead of competitors:

It can be difficult for a small business to compete with large brands. Most large brands have more locations, marketing budget and freedom to offer lower prices. However, good loyalty marketing strategy allows small businesses to get closer to customers and have an edge over large brands.

Marketing strategies to increase customer loyalty

Loyalty marketing involves rewarding your existing customers, but it also goes beyond just a simple thank you to your loyal base.

1. Points system & reward programs:

Remember that loyal customers do not need to be sold on your brand, but rewarded for being your customer. If you want your customers to endorse your brand and stay happy with what your business provides, have a loyalty reward program. A point system structured to boost customer purchasing power can help increase sales.

Next, plan it out. Should customers win points for every purchase? Or website visits?

This is up to you. Ideally, you can provide 2 points for 1 purchase and after 20 points, the customer will receive a reward I.e gift voucher, discount coupon or more. Reward points with the amount spent too. For example, 20 points for a purchase of INR 2000.

2. Discount Codes:

Provide discount codes to customers after their 3rd or 4th purchase with your brand. Customers feel valued when you provide exclusive discount codes for them. 

For example, you can provide free shipping for customers above a certain amount or give a 50% discount after their 10th purchase. You can send them an SMS or email alert with an OTP to unlock the discount code.

If you have an online store on Instamojo, you can create a discount code for your products in a few simple steps.

Related Read: How to use discount pricing strategies to make more sales

3. Customer surveys and feedback:

Ask your customers to review your brand. Show them you care. Loyalty marketing strategies involve speaking to your customers even after the purchase is made.

You can use email marketing services like MailChimp to ask easy one-question surveys to customers who have visited your website but not indulged in a purchase.

Customer surveys are an excellent way to find out what your ‘loyal’ customers really think about you. You can also use social media polls to get customer feedback.

Examples of customer feedback forms:

  1. Email newsletter
  2. Google Survey forms
  3. Face to face post billing or questionnaire at the counter

But how does this connect to loyalty marketing? Your customer should be given an incentive for their feedback. A 10% discount on their next purchase, an INR 500 rupee voucher for their birthday or a free item of their choice. This motivates them to give genuine feedback and feel valued.

4. Referral Programs:

A referral program is a marketing tool where you reward your customer to refer your business to a friend/colleague. A refer-and-earn program can help you multiply your business, raise brand awareness and increase your marketing ROI.

Referrals attract more educated and trusting customers – people who help spread the word online. Loyalty programs and referral programs are sometimes thought to be similar, but they serve different functions. Loyalty programs incentivize customers to purchase from you repeatedly, while referral programs incentivize customers who get their friends to buy from your brand.

Top 5 Loyalty Marketing Strategies instamojo
An examples of a referral program


5. Communities and membership clubs:

Ask loyalty customers questions even before a product goes out. Ask them for suggestions, tips and ideas. Where? Build an online community that gives your oldest/most popular customers VIP status.

The simplest way is to create a social media account and gradually build a community.

Create a members-only VIP community that allows people who have left their email IDs with you to join. 

Your VIP club doesn’t have to cost your customers anything, and it doesn’t have to be difficult or costly for you to implement either. You can offer VIP perks like new product previews, time-sensitive deals, an expedited checkout process, free samples and more.

6. Celebrate customers on social media

Speaking of community, a great way to boost customer loyalty through it is by acknowledging customers, especially your most loyal ones.

Feature their story and celebrate their wins. This will also fuel interactions on social media, which is a great way to build your brand online.

Instamojo Leads Manager: Keeping customers close

Don’t lose your customers. Sometimes, they are just forgetful. The Leads manager tool allows you to view dropped-off customers in one place on your Instamojo dashboard. You can use the Instamojo leads manager tool in your App Store to pick out potential buyers who have dropped off,  i.e not completed their transactions.

All you need to do is create an Instamojo account.

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