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Customer loyalty: the practical guide for local businesses

Customer loyalty is everything a business does to make its customers come back and buy again and again. For local shops it usually means a stamp card, a points card or a giveaway that rewards repeat visits. Today you can run it all from your phone, with no paper cards, for less than €6 a month.

· Socios Team

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

  1. Set your goal: more visits, a higher average spend or winning back customers who have stopped coming.
  2. Choose the mechanic: stamps, points or a giveaway, using the table above.
  3. Pick a reward that is attractive and affordable: ideally it should cost between 5% and 10% of what the customer spends to earn it.
  4. 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.
  5. 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.

Frequently asked questions

What is a customer loyalty programme?

It is a system that rewards customers for coming back: stamps per visit, points per purchase, giveaways or exclusive discounts. The aim is for customers to return more often and spend more over time.

How much does a customer loyalty app cost?

With Socios, the customer app is free and businesses get a 14-day free trial. After that, the Pro Plan costs €5.99 a month, with no long-term contract.

Which is better, a stamp card or a points card?

A stamp card works best when customers spend a similar amount on each visit (cafés, bakeries, hair salons). A points card is better when the spend varies a lot (restaurants, grocery shops, fashion or hardware stores).

Do I need a card terminal, a tablet or a special till system?

No. With Socios all you need is your phone: scan the customer’s QR code with the camera in the Socios Plus app and the stamp or points are added instantly.

Does a loyalty programme work for small businesses?

Yes. In fact, that is where it makes the biggest difference: in a neighbourhood shop every regular counts, and a simple programme makes them come back more often.

How long does it take for a loyalty programme to show results?

Usually, within the first month you will see the first customers completing their card and redeeming their reward.