I received my FlyBys statement over the weekend and compared how Coles Myer rewards me compared to people who use the loyalty software in the Point of Sale system developed by my company. Since we launched our loyalty software we have seen the most common loyalty reward priced at 2% of revenue. Some stores, offering higher priced items, provide a reward equal to 10%. Small businesses are using the tools to drive sales. Their view is that this will only happen if the reward is genuine. They are smart in the mechanics they use and how they communicate the offering to the customer. Employees are trained to use the loyalty program to drive sales. Direct mail is used to remind customers of how close they are to rewards. Across at Coles Myer the ‘reward’ is less than half of one percent. There is no personal across the counter connect. The statement and accompanying advertising material probably costs more than the rewards themselves. Yet their advertising would have you believe that FlyBys offers exceptional value.

This is an opportunity for small business. Develop a structured loyalty program, engage all employees, support the program with the right technology and remind customers at every opportunity of the value.

In my own retail business we have been using a loyalty program for eighteen months and the resu7lts are exceptional. Sales in the particular category are showing four times the industry average. For our part we have been able to use out knowledge from the technology to drive basket size and thereby increase customer efficiency for the business. Along the way we have been able to win back some customers from Coles and Big W.

The key with any loyalty program is that you reward for above average behavior.