Look, I get it. You’re standing behind the counter, looking at the foot traffic on the street, and wondering why that regular customer hasn’t been in for three weeks.
You’ve probably thought about starting a loyalty program. Everyone else has one, right? The big supermarkets, the coffee shop down the road with their dog-eared cardboard stamps, and every massive online retailer blowing up your inbox.
But here’s the honest truth: most loyalty programs are absolute rubbish.
They’re a drain on your time, they eat into your margins, and half the time, they don’t actually change anyone's behaviour. If someone was going to buy from you anyway, and you give them a 10% discount just for showing up, you haven't 'built loyalty.' You’ve just handed over your profit for no reason.
I’ve sat through enough coffees with Brisbane shop owners to know the struggle. You want more sales, you want the till to keep ringing, and you want people to choose you over a generic big-box retailer.
So, let’s talk about whether a loyalty program is actually worth the headache for your business, and if you do it, how to make sure it actually puts cash in your bank account.
The Big Myth About Loyalty
First up, let’s kill a myth. Loyalty isn't a plastic card. It’s not an app. It’s a feeling.
If your service is crap or your shop smells weird, no amount of 'buy ten get one free' offers will save you. People come back because they like you, they trust you, or you make their life easier.
The program is just the tool we use to remind them that we exist and to give them a little nudge when they’re thinking about going elsewhere.
We’ve seen shops spend thousands on fancy software only to realise their staff weren't even asking for customer names. That’s a waste of money. Before you spend a cent, you need to know what you’re trying to achieve. Are you trying to get people to spend more per visit? Or are you trying to get them to come back more often?
Why Most Programs Fail (And How to Not Be That Person)
I’ve seen a lot of these go south. Usually, it’s because the owner made it too complicated.
If I have to solve a math equation to figure out what my 'points' are worth, I’m out. If I have to download a buggy app that wants my blood type and my mother's maiden name, I’m definitely out.
Your customers are busy. They’re stressed. They’re probably thinking about what’s for dinner or where they parked the car. You have about three seconds to explain the value.
The 'Discount Trap'
This is the biggest mistake. You start a program that’s just a flat discount.
"Join our club and get 10% off everything!"
Sounds great, right? Wrong. You’ve just lowered your prices for your best customers. Those are the people who were already willing to pay full price! You’re literally paying them to do what they were already doing.
Instead, you want to reward the extra behaviour. Reward them for coming back a second time in a month. Reward them for spending $100 when they usually spend $60.
If you want to get more people through your front door, you need to offer something that feels like a bonus, not a haircut to your bottom line.
The Three Types of Programs That Actually Work
I’m a fan of keeping things simple. In my experience, there are really only three ways to do this properly for a small shop.
1. The Simple Punch Card (The Old School Way)
Don’t laugh. For a lot of businesses—cafes, barbers, nail salons—this is still the king.
Pros: It’s cheap. It’s physical. People put it in their wallet and see your logo every time they look for their debit card. Cons: People lose them. You can’t track any data. You don’t know who your customers are.
If you’re just starting out and have zero budget, do this. But get decent card stock. Nothing says 'I don't care' like a flimsy piece of paper that disintegrates in a pocket.
2. The Digital Points System
This is where you use your POS (Point of Sale) system to track spend. $1 equals 1 point. 100 points equals a $10 voucher.
Pros: It’s automatic. No cards to lose. You get an email list (which is gold). Cons: It can feel a bit 'corporate' if you don’t put some personality into it.
This is the sweet spot for most retail shops in Brisbane. It allows you to turn your customer list into a cash machine by sending out a quick text or email when things are quiet.
3. The 'VIP' Experience
This isn't about points at all. It’s about access.
Maybe your 'loyalty members' get invited to a closed-door sale night with some beers and snacks. Maybe they get first dibs on new stock. Maybe they get free gift wrapping or local delivery.
This is how you beat the online giants. Amazon can’t invite you into a store for a drink and a chat. Use that to your advantage.
Let’s Talk Numbers (The 'Will This Make Me Money' Part)
I promised to be honest about costs.
If you use a digital system, you’re usually looking at a software fee. This could be anywhere from $30 to $200 a month depending on how fancy you get.
But the real cost is the 'reward.'
If you give a $10 voucher for every $100 spent, that’s a 10% hit to your margin. If your margin is 50%, you’re now at 40%.
You have to ask yourself: "Will this person shop here 20% more often because of this reward?" If the answer is no, you’re losing money.
We usually suggest starting small. Maybe it’s a free gift that costs you $2 but has a 'value' of $10. Or maybe the reward only kicks in after a certain spend threshold that’s higher than your average sale.
How to Launch Without Losing Your Mind
If you've decided to go for it, don't overthink the launch.
1. Pick your platform. Check if your current POS (Square, Shopify, Vend, etc.) already has a loyalty feature. Most do. Turn it on. 2. Keep the 'earn' simple. One dollar = one point. Don't make people do math. 3. Train your staff. This is where it lives or dies. If your team doesn't ask "Are you in our rewards club?" at the till, the whole thing is pointless. 4. Give them a reason to join NOW. "If you join today, I’ll give you double points on this purchase." Works every time.
What to Do When Business is Slow
The best part about having a loyalty program isn't the points. It's the data.
When it’s a rainy Tuesday in Paddington and the shop is empty, you don't have to sit there twiddling your thumbs. You can look at your list, find the people who haven't been in for 60 days, and send them a "We miss you" offer.
That is how you actually move the needle. You aren't just waiting for the phone to ring; you're making it ring.
My Honest Take
Should you start a loyalty program?
If you’re just going to set it and forget it, then no. It’ll just be another monthly subscription you forget to cancel.
But if you’re willing to use it as a way to talk to your customers, to thank them for coming in, and to give them a reason to choose you over the big guys? Then absolutely.
It’s one of the few ways a small shop can actually compete in 2024.
Start simple. Don't give away the farm. And for heaven's sake, make sure your staff actually talk to people.
If you want to chat about which system might work for your specific shop, or you're worried your current marketing is just burning cash, give us a shout at Local Marketing Group. We’ll tell it to you straight.
You can find us here: https://lmgroup.au/contact