Small businesses are often skeptical of the returns that a dedicated Loyalty Rewards Program is likely to deliver. Running a customer loyalty program is often assumed to be a resource-intensive exercise, with no clear way to measure how efficiently it is delivering on its intended objectives. Many think that it is another brand-building gimmick that big retailers indulge in – with no tangible benefits. However, nothing could be farther from the truth.

We take a look at some of the top myths that have perpetuated regarding customer loyalty programs and set the record straight once and for all:


Myth 1: Customer loyalty rewards programs are suitable for big organisations that can afford to invest in expensive software and dedicated personnel. They don’t deliver results for small businesses.


Truth: No matter the size of the business, an indisputable fact is that customers are always on a lookout for ways to save more. Hence, they will naturally welcome a systematic and methodical mechanism to track their purchases, earn rewards on purchases and redeem them later for discounts. There is irrefutable evidence that loyalty programs are popularized by word-of-mouth publicity and their popularity is contingent on how simple they are. You do not need a dedicated employee to manage the program, for most loyalty solutions today are cloud based, and can be managed effortlessly. What’s more, with a variety of free cloud based loyalty software available today, getting started doesn’t have to cost a dime.


Myth 2: Customer Loyalty Programs are difficult to execute and manage; they complicate and prolong the payment process.


Truth: The new age customer rewards programs are simple, efficient and easy to understand. They are integrated with unique customer information like a phone number or email id which can be used to track purchases and manage rewards. Since the entire program is cloud based, it is automated and does not hamper the payment process. If anything, loyalty management software are an easy way to keep a record of your customers, run promotional campaigns, communicate limited period offers and drive sustainable business growth.


Myth 3: Customers reward programs do not give back any tangible benefits; even if they do, there is no way to measure them.


Truth: Loyalty rewards programs today are extremely dynamic and intelligent. Not only do they meticulously record every transaction, but also help in making sense of the massive customer data that is generated with every purchase. Analytics based reports, predictive customer behavior, intelligent promotions, and whatnot – customer loyalty rewards programs are adept at just about everything today. Hence, measuring the efficacy of a Loyalty Rewards Program has never been easier. The economics of it is rather simple: the likelihood of a customer making more frequent and bigger purchases goes up if they are a part of a unique loyalty program.


Myth 4: Customer reward programs will work only if the rewards on offer are huge.


Truth: While the entire concept of a Loyalty Rewards Program is based on the concept of savings and discounts, loyalty and retention are important aspects of the same. The fact that a business values its customers enough to provide them with premier deals, exclusive discounts, flash sales and a personalized shopping experience takes precedence over the value of discount on offer. This also results in the creation of an ever-growing community of customers with shared interests and taste.


Myth 5: The USP of my business is strong enough to bring back loyal customers – I don’t need a Loyalty Rewards Program to keep them coming back for more.


Truth: But, you do! No matter how good a business is, or how many customers swear their unwavering allegiance to you, a customer loyalty program will undoubtedly increase the frequency of purchases made by the customers, increase the customer base and cultivate stronger brand loyalty and retention. Businesses benefit by keeping a record of recurring customers, offering them personalized deals and tailoring the experience for their customers. The question isn’t if you will benefit from a customer loyalty program or not, but how much can you benefit from one.

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