Why keeping customers pays more than finding new ones
According to Harvard Business Review, acquiring a new customer costs between 5 and 25 times more than keeping one you already have. And according to Bain & Company, increasing customer retention by 5% can increase profits by 25% to 95%.
In a neighbourhood business you notice this straight away: a customer who comes in twice a week instead of once doubles their annual spend without you spending an extra penny on advertising. Loyal customers also recommend you, and that word of mouth is exactly how to get more customers.
Types of loyalty programme
| Programme |
How it works |
Best for |
| Stamp card |
One stamp per visit or purchase; complete the card and get a reward («9 coffees = 1 free») |
Cafés, bakeries, hair salons: frequent visits and a similar spend |
| Points card |
Every euro spent earns points that can be exchanged for discounts or gifts |
Restaurants, grocers, fashion, hardware stores: the spend varies |
| Giveaways |
Every purchase is an entry into a regular prize draw |
Any business that wants to encourage visits between purchases |
| Coupons and promotions |
A one-off discount for a date or a product |
Launches, quiet days, clearing stock |
| Tiers (VIP) |
More perks the more the customer buys |
Very frequent customers with a high spend |
Rule of thumb: if your customers always spend about the same, use stamps; if the spend varies a lot, use points; add giveaways to keep interest high.
Paper card or digital loyalty
|
Paper card |
Digital loyalty (app) |
| Lost or forgotten |
All the time |
It lives on the phone |
| Fraud (fake stamps) |
Easy |
No: every stamp is validated with a QR code |
| You know who your customer is |
No |
Yes: frequency, last visit, redemptions |
| You can get in touch |
No |
Yes: notifications about rewards and offers |
| Cost |
Reprinting every few months |
From €5.99/month |
How to create your loyalty programme in 5 steps
- Set your goal: more visits, a higher average spend or winning back customers who have stopped coming.
- Choose the mechanic: stamps, points or a giveaway, using the table above.
- Pick a reward that is attractive and affordable: ideally it should cost between 5% and 10% of what the customer spends to earn it.
- Make it easy: a QR code on the counter and a clearly visible poster. If signing up takes more than a few seconds, customers won’t bother.
- Measure and adjust: check every month how many customers come back and how many redeem the reward.
With Socios, steps 2 to 5 take about 5 minutes in the Socios Plus app, and your customers use the Socios app, which is free. See the details in how it works.
How to get more customers into your local business
Loyalty keeps customers, but it also attracts new ones:
- A QR poster in the window: advertise the reward («your 10th coffee free») and turn passers-by into customers.
- Business map: Socios users discover nearby businesses that are already on the network.
- Giveaways people talk about: an eye-catching prize gets the neighbourhood and social media talking.
- Google reviews: ask your loyal customers for a review; they are the ones who speak most highly of you.
- Messages to your customers: let people who already know you hear about what’s new or about special-offer days.
Metrics to keep an eye on
- Return rate: what percentage of customers come back within 30 days.
- Average frequency: visits per customer per month.
- Redemption rate: completed cards versus cards started. If it is very low, the reward is too far away.
- Inactive customers: who hasn’t been in for over a month. That is the moment to send them an incentive.
Want to know what it could earn you? Try the return calculator.
Common mistakes
- Asking for too many stamps: 20 stamps for one coffee would put anyone off.
- A reward nobody wants, or one that costs the business too much.
- Not promoting the programme: without a poster or a reminder at the till, nobody signs up.
- Not measuring anything, so you never know whether it works.
Loyalty by industry
Every business has its own rhythm. These guides explain how many stamps to use, which rewards work and which campaigns to run:
Comparing tools? Take a look at our loyalty app comparison.
Socios in numbers
Socios is already live in more than 10 businesses in Spain and Mexico, which have created more than 50 promotions and given more than 100 rewards to their customers.