How to Motivate Customers With Rewards

Companies will spend a lot to attract new business. Studies have found that it costs five times more to acquire a new customer than to keep an existing client. Reward programs, designed to retain or upsell existing customers, can provide a great return on your investment.

Difficulty: Easy

Instructions

1. Distribute coupons. If your business has a physical location, tuck a discount coupons into your customers' shopping bags. If your business is online, include a coupon discount code in his package before shipping or send the code in an email.

2. Declare "Buy One, Get One Free" sales for items that carry high profit margins. This is often more effective than running a half-price sale. You still get the full amount of a single sale from the customer at the while liquidating excess inventory.

3. Use a loyalty punch card or an earned points program. If your business has walk-in customers, give them a punch card and punch a hole in it for every purchase they make over a certain dollar amount. Many customers will add something to their purchase just to qualify for that next punch. With an online business, let customers earn points for every dollar they spend. They can redeem the points for other items or discounts on their next purchases.

4. Award special privileges to repeat customers. After making their second purchase from your business, give your customer VIP status. In the case of a brick and mortar store you can give your customer a VIP card to present when making a purchase. With an online store, attach the VIP status to their User IDs so that it shows when they log in. Give your VIP customers something extra, such as small discount or free gifts with certain purchases. Keep a list of VIP customers and send them advance notice so they can take advantage of sales and special offers.

5. Send a thank you note to customers who make large purchases from your business and include discount coupons inside of their cards. Keep a record of customer's birthdays and anniversaries and send them cards with coupons enclosed to celebrate their special days.

6. Offer a referral program. Word of mouth is the best way to get new customers. Offer your customers a reward in the form of discounts or gifts for any new business they send your way. Hand out business cards or coupons for your customers to pass on. Each card or coupon should have a blank space on the back so that the referring customer can enter her name or customer number. Every time a card of coupon is turned in by a new customer, give the person who distributed the card a reward.