Have you ever wondered why some big-box stores and national chains give you a free $5 or $10 gift card with purchase if you spend more than a specified amount? It’s because consumers consistently spend more than enough to make the gift card redemption profitable for the business, even though they are giving away money up front.

So, why not take a page from the big boys to boost your startup’s sales?

Better yet, why not roll out a customer loyalty program that incorporates this concept, so you can forget about tactics like designing, printing and mailing coupons?

Loyalty programs that incorporate this concept into their rewards can be very profitable.

Here’s a fun example that combines several aspects of what makes a loyalty program successful:

Let’s say your company sponsors an event, such as a local baseball game. You could have the announcer say, “Text 888-555-1212 to get a free $5 credit toward pizza at Joe’s Pizza this month.”

This type of promotion:

• Gets customers into your loyalty program with no effort
• Gives them regular (but small) rewards to encourage repeat business, and
• Gives you an excuse to connect with your customers periodically to remind them to come back in

What to look for in a customer loyalty program

A good loyalty program can be very effective without costing you a lot of time or money.

The most successful loyalty programs are easy to join, demand minimal employee training and don’t burden you, as the business owner. Text-to-join loyalty programs, for example, allow your customers to easily join with a few quick keystrokes.

Pairing customer loyalty programs with cash perks

Some loyalty programs also provide startups with a way to offer customers regular cash perks. Automatically offering monthly cash perks to loyalty members makes it easier than ever for startups to encourage repeat business without even having to think about it.

Once you have a customer loyalty program in place, possibly with the addition of a regular cash perks offer, here are four tips to strengthen your program:

Offer mobile rewards to customers

Mobile rewards and loyalty programs are often quite popular with customers because they are easily reachable and typically easy to understand. Consumers spend nearly four hours a day on their mobile devices, making text messaging an great avenue for loyalty programs.

Texting rewards also allows you to eliminate physical loyalty cards and coupons. A promotion card might have worked in the past, but merchants can easily run into a less than optimal customer experience with buyer fatigue or frustration if a punch card is lost and they have to start over.

Mobile rewards live right on your customer’s phone, so they are always accessible and easy to redeem.

Remember cash is king

Much like credit cards that reward customers with cash back “gifts” after purchases, we are seeing a rise in merchants offering cash back or mobile “bonus bucks.”

In fact, businesses we work with are reallocating the funds that they would typically spend on print or direct mail advertising and providing that money to their customers in the form of cash back mobile rewards via their customer loyalty programs.

For example, as a “thank you” for visiting or participating in a loyalty program, a $5 cash reward is given for your next visit.

Track and tailor programs

In the past, you may have had trouble evaluating the ROI on your advertising or marketing dollars.

However, mobile loyalty programs provide the ability to track loyalty transaction history daily, weekly or monthly. These results can help you tailor your offers and rewards based on consumer interest, seasonal changes and/or shifts in products or services available.

Make it simple for employees and customers

Finally, the golden rule for all loyalty marketing programs, is: keep it simple.

Programs should not place a burden on employees and training should be quick and straightforward. Otherwise, employees will not encourage customer participation, which is necessary to maintain the success of your loyalty program.

Additionally, making it easy for your customers to join and use rewards promotes the best customer experience, ensuring they will continue to participate in the program and, most importantly, do business with you.