Loyalty Points for an online shop

Loyalty Point Schemes - Are they worth them?

On my new online shop www.battlefieldmodels.com I offer a discount rate when more than one item is bought and believe that to be a good offer for my customers. However I have had laid before me a package which now can offer loyalty points to my customers. I admit my initial reaction as a small business is "Hold on I'm already eating into my profits with discounts. (May I also say here and now before people presume 'yeah good percentage rates I bet', that after you take into account initial purchase VAT, Tax, National Insurance, discounts, absorbing some of the increasing postal costs etc, it isn't as large as some may think). But I digress, as upon further reflection the loyalty scheme for small online business' can be an essential tool for continuing customer loyalty.

When you think about it, you're thinking to yourself, 'I need to go grocery shopping' and subconsciously I believe we decide on which supermarket to go to in part with the one we may have a loyalty card with, that can bring us future rewards. That rule of thumb stands firm with online shops. And after all why shouldn't I reward those loyal customers with more than the universal discounts I give to customers who may just visit for one order. When you then start to take all this into account then really it becomes less about reducing profits and more about "Why am I not doing this already?" Yes we are not Tesco who sell lots of items for little profits but in the long run, surely it is worth the cost!

I'd be interested in any other views.

Cheers,
Paul
Battlefield Models
www.battlefieldmodels.com