You buy a cup of coffee from neighborhood café, and as they hand you your receipt you get a calling card sized, attractively designed "loyalty record," promising that if you come back for 8 more cups anytime within year you'll get your 10th cup for free.

A few days later you call for pizza, and person on phone announces: "Congratulations! This is your 5th order from our store in past 6 months! You automatically get a Preferred Customer's Value Card with this delivery, FREE!" And when card arrives you happily discover that you can now get a 10% discount on every succeeding order you place for rest of year.

The next day you go to your local supermarket for groceries. As cashier rings up your purchases she asks if you already have a Privilege Card, and since you don't have one yet she encourages you to get one -- just keep today's receipt along with other receipts from their store (from previous and future purchases), and once recorded amounts total up to $500 or more, you get a "Privilege Card" that rewards you with discounts and product giveaways every time you return to their store.

Now, these 3 experiences might make you shake your head and say "déjà vu," but it isn't really as Twilight Zone as it seems.

Smart business people know that it costs more time & money to win over new customers than to keep old ones. And this is simply what these 3 experiences are all about: keeping old customers loyal, therefore getting more profits from their repeat purchases in long run.

And WE could certainly benefit from learning from these "loyalty development" strategies, even if we're doing business entirely online.

Be More Than A Bookmark -----------------------

Most of successful brick & mortar loyalty programs are often created out of necessity.

Chances are, several stores offering same products suddenly decided to invade same target market, and "been doing business since our grandfather" stores quickly realized they now had to compete for same customers who didn't use to think twice about buying from them.

This same phenomenon can never be more parallel than when running a store on net: It takes customers practically same amount of effort to visit ANY website in cyberspace (i.e. same neighborhood), so you MUST give them a compelling reason to particularly visit YOURS.

You think it's enough to tell them to "bookmark" your site? Think again: Chances are, they've got another 2 megabytes' worth of bookmarks, too -- and they've never had chance to visit most of them again.

4 Kinds of Loyalty Rewards --------------------------

Now that you're looking into ways to keep winning clients you've already won, here are 4 kinds of "loyalty rewards" that other businesses have successfully used, both online and off:

1) Outright Discounts

Nothing convinces more people into buying something (or somewhere) than thought that they'd be getting more for less.

In recent years, there have been some changes in marketplace that are of benefit to small business owners. For example, Internet procurement sites have emerged offering discount rates on everyday office supplies such as toner or paper. However, high cost of advertising has not been formally addressed. That’s why many small businesses are taking matters into their own hands and joining forces in marketing “co-ops”.

Here’s an example of how it works. Andy’s Accounting Firm and Larry’s Legal Firm are both small businesses operating in business to business sector. Andy services small businesses with their accounting needs, and Larry is a lawyer specializing in small business issues. Andy and Larry both wish to purchase advertising space in a popular small business magazine. The rate they are quoted individually is $5000 for back page of magazine. Since they are not repeat advertisers, neither Andy nor Larry receive any kind of discount. So how do they save money on this advertising venture? A co-op approach on one of two fronts will cut their advertising costs significantly: