Businesses today recognize the value in customer retention and are implementing an approach geared towards building up customer loyalty. And for many companies, loyalty programs are a natural step to keep customers happy. Loyalty programs can look like a lot of different things, but at their core most involve a reward for return business. Rewards can mean: punch cards, discounts, store credit, prizes, point systems, and any other benefit that might encourage a customer’s loyalty.

If you don’t have a loyalty program already, here are 5 reasons why you might want to consider it.

Loyalty programs boost growth. You can’t deny the power of incentives in winning customer loyalty as a marketing strategy. If you are focused on growing your business, and who isn’t, a loyalty program should be at the top of your list. Loyalty programs work.

Keeping a customer is cheaper and easier than trying to attract new ones – If you’re worried about the cost of implementing a loyalty program, understand in the long run, the money you save on keeping your customers far exceeds the amount you will spend chasing down new ones.

Loyalty programs give new customers a reason to stay and help already loyal customers feel valued. It’s common sense: the more a customer feels appreciated the more likely they are to return and recommend you to their family and friends. The value of a referral is measurable and loyalty programs are powerful motivators for your customers to give them.

Built-In Market Research – Some loyalty programs can track the spending habits of your customers, depending on which method you use. Tracking in a loyalty program is a way to conduct your own personalized market research on what drives people to spend money at your business and which services they purchase most often. The variety of information you can glean from customers who participate in your loyalty program helps you get to know your customers. When you know your customers better you can improve their experience using you as a service provider so you can continue to earn their future business.

Loyalty programs practically run themselves. Once your customers have acclimated to the order of things, your work level decreases significantly but you’ll continue to reap the rewards (increased business, positive reputation, customer referrals, etc.).  Before you know it, your loyalty program will be second nature for both you and your customers, and any extra effort involved has become a thing of the past. What’s not to love about that?

A loyalty program should both encourage a customer’s loyalty to you as well as demonstrate your loyalty to the customer in return. A little customer appreciation goes a long way. Keep your program simple, make sure customers don’t have to alter their purchasing habits or go too far out of their way to sign up, the less steps involved the better. Make rewards easy to redeem and of enough worth to act as an incentive. The payoff for loyalty programs is proven and of definite value to you, consider implementing one for your business today.

For more insights on marketing strategy that actually works for small business, subscribe to the FreshLime Newsletter here. Connect with Jay Bean, Founder of FreshLime and Small Business Marketing Expert on LinkedIn and Twitter.