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How Digital Loyalty Boosts Small Businesses

Digital Loyalty programs grow revenue quickly from loyal customers

A lifelong customer is the goal for any small business owner. No matter what your product or service is, you want your customers to keep coming back to you.

Digital loyalty programs pave the way for local businesses to increase customer loyalty and retention. In fact, 71% of growing businesses say that they survived COVID-19 thanks to going digital.

With more methods of contact than ever before, you need to be able to optimize your brand’s communications to gain loyal customers. 

It’s not just about having a digital loyalty program in place– it’s about having a loyalty platform in which you can engage with your customers even after purchase. 

Loyalty marketing is at every corner of customer journeys and growth marketing strategies. When done by working with SaaS companies like Stemless Co., it’s giving your business everything it needs to succeed in a digital era.

In this article, we’ll explore the benefits of digital loyalty programs for small business marketing. We’ll also look at how retailers can foster customer loyalty through these programs.  

Increased Customer Retention

Did you know that 5% increase in customer retention can lead to up to a  25% increase in profit

By design, one of the primary benefits of a loyalty program is that it helps small businesses increase customer retention and reduce churn. 

Churn, or customer attrition, refers to the loss of customers over time. Reducing churn is critical for any business, as it can help increase customer retention and drive long-term business growth.

By offering personalized rewards and incentives for repeat purchases, small businesses encourage customers to continue doing business with them rather than switching to a competitor.

Enhanced Customer Service

Not only does digitizing your loyalty program increase customer retention, it can also enhance the customer experience. 

Give your loyalty customers more of what they actually want. Personalizing the customer experience by offering rewards and incentives based on a customer’s purchase history and preferences creates a more positive and enjoyable customer experience.

In today’s digital world, 54% of customers will stop shopping with a brand if it doesn’t provide engaging content

Here are three things the loyalty punch card can’t do to engage your customers:

  1. Customized rewards & incentives:Digital loyalty lets you tailor your rewards to an individual customer’s purchase history and preferences, not the masses’. 

For example, you could offer a free product or service to a customer who has made X number of purchases, or offer discounts on products or services that the customer has shown an interest in for their birthday.

  1. Personalized communications: Digital loyalty program data can also be used to send personalizedcommunications to customers. 

Now, your business can send SMS messages to customers with hyper personalized recommendations or special offers based on their purchase history or loyalty status.

  1. Segmentation: A loyalty program can also be used to segment customers based on their preferences and behaviors (also known as their buyer persona). 

Segmentation allows you to reward the right customers at the right times. This ensures that you’re able to reinforce the behaviors you want to see from your customers automatically. 

Overall, digitizing your loyalty rewards program allows you to offer more value to your customers with a more personalized and tailored experience. Doing this correctly will allow you to begin mapping the customer journey with vital customer touchpoints that are specifically helpful to your brand; something traditional marketing just can’t do.

Improved Customer Engagement

Digital loyalty programs can help your small business increase customer engagement. 

By providing a platform for customers to track their rewards and progress, you can keep customers engaged with your brand. This can help build stronger relationships with your customers and increase the likelihood of repeat business.

Some examples of customer engagements that are possible with a digital loyalty program are:

  1. Referrals: A loyalty program can also be used to encourage customers to refer friends and family to the business. 
  2. Social media engagement: Digital loyalty programs can be integrated with social media platforms to encourage potential customers to engage with your brand before and after purchase.  You can even offer rewards for customers who follow your business on social media or share content about the business on their personal social media accounts.
  3. Online reviews: Use digital loyalty to encourage your customers to leave online reviews about your business after interacting with your brand.  By offering rewards or incentives for leaving reviews, you can increase the number and positive nature of their online reviews, which can help drive new customer acquisition.
  4. Customer feedback: A loyalty program can be used to gather customer feedback about the business. By offering rewards or incentives for providing feedback, businesses can gather data driven insights about their customers’ needs and preferences.

Providing more personalized engagements with customers can help you understand their needs and preferences. Plus, it will make it easier for you to meet or exceed their expectations leading to higher levels of customer satisfaction. 


Digital loyalty programs can be integrated with a variety of other platforms to provide additional functionality and capabilities while making your program run all the more smoothly.

Any digital loyalty program worth its weight will be able to offer your business integrations with other systems & platforms such as:

Point-of-sale (POS) systems 

Digital loyalty programs can be integrated with POS systems to track customer purchases and apply rewards or incentives. This allows businesses to easily track customer engagement and provide a seamless customer experience.

Customer relationship management (CRM) systems

CRM integrations to allow businesses to track customer interactions and engagement across multiple channels. This can help you better understand your customers so that you can tailor your marketing campaigns and product offerings to better meet their needs.

Marketing automation platforms

Digital loyalty programs can be integrated with marketing automation platforms to enable personalized and targeted marketing campaigns. This can help your brand increase customer engagement and drive repeat business.

Customer Data

Having access to valuable insights can help you make your next strategic marketing move. 

By tracking customer purchases and engagement with a digital loyalty platform, you’ll be able to gain insights into your customers’ preferences and behaviors. You can use this data to better understand your customers and tailor your marketing and product offerings to better meet their needs.

Having this data also allows you to reward customers for the behaviors that will bring more value to your business. It’s a win-win for loyalty data. You’re able to give your customers more of what they actually want, and in return, your business gets boosted by your loyalty efforts.

Thinking about going digital? 

Your loyalty program should be seen as an enhancement to your customers’ experience and relationship with your brand. 

And to succeed in the digital era we find ourselves in today, your business must commit to embracing technology as a mission critical tool for growth. 

Stemless is ready to help. We provide your business with an easy to use digital loyalty platform, text message marketing tools, and superior customer loyalty analytics. 

Stemless Co. can help your small business leverage your loyalty data for an improved CX and increased customer retention by creating a loyalty program tailored to your business and your customers. 

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