Customer loyalty programs are all the rage. They help businesses to encourage shoppers to choose their store over the competition. They could get business, over and over again, without spending a dime on advertising. Learn how customer rewards programs work. Avoid the pitfalls that others might fall into that can make a loyalty program backfire. Increase loyalty and sales even when you’re decreasing inventory or cutting back on the merchandise that you offer.

You need to have a hook. Your program needs to be enticing enough to make your customers want to sign up. Additionally, the program needs to be easy to understand. It is preferable if your associates can explain the program in one, short statement. For example, “Put your e-mail address here if you would like to receive a 40% off coupon to use on your next visit.” The sentence tells the customer everything that they need to know. All you need is their e-mail address and they will receive a coupon for 40% off. Simple and to the point is key.

The process of signing up has to be fast and easy. If customers have to fill out more than two bits of information, they are not likely to do it. In fact, if they only think that it may be more involved, they’ll shy away from hearing any more information. A statement like, “Do you want to sign up for our rewards program?” can make almost every customer immediately say, “No thanks”. It gives the impression that they will have to fill out a lot of information and read a lot about how this program works. Avoid statements that give the customer an immediate out before they know what your program is about.

Remember that it can cost less to keep old customers than to invest in the advertising that it could take to find new ones. Treat your customers with respect. Respect their time and don’t expect them to go out of their way to participate in a program. Make it simple. Keep a database of their purchases so that returns and earning rewards are easy. Hand out frequent shopper cards and let them quickly know that they can use it to earn rewards, like discounts or free products.

Advertise your rewards programs outside of your front window. People sometimes look for deals and visit stores that have them. You can put discreet signs in your fitting rooms, display them on your clothing racks, and put reminders by your registers. They could be looking for a price atop yourclothing rack and quickly learn about your rewards program.

However you do it, make it easy and attractive to your customers. You could find that it’s easy to keep your customers coming back and spending more than you ever thought possible before.

About the Author: John Garvey is on the staff of Only Garment Racks, a leading online source of clothing racks including garment racks. Find a high quality clothing rack or garment rack at