Starting a loyalty program doesn’t have to be complicated. And right now, it’s one of the smartest moves you can make for your market.
Over the past five years, customer acquisition costs have climbed nearly 60%, and businesses now lose an average of $29 for every new shopper. For small markets, that adds up fast.
If you want to keep customers coming back, a loyalty program makes sense — but figuring out how to actually get started isn’t always as clear.
This blog shows you how to start a loyalty program for your market with practical examples, setup tips, and tools to track what’s working.
Why Customer Loyalty Programs Work
Think about your own shopping habits. Do you go out of your way to stop by a store that gives you something back, even if it’s just a small discount or a freebie now and then?
Most people do — loyalty programs tap into that behavior by rewarding repeat visits. They create a reason to return, especially when prices are similar across stores.
A loyalty program builds ongoing value through consistent rewards that reflect what your customers already care about. For small and specialty markets, this might mean offering deals on staple items, rotating seasonal promotions, or exclusive perks for your most loyal customers.
Beyond discounts, loyalty programs also help you build better relationships with shoppers. When customers sign up, your point of sale (POS) system can track what they buy most often, making it easier to offer personalized deals and keep them coming back.
Common Types of Loyalty Programs for Markets
While there might not be a single “best” format, as it depends on your customer base, the kinds of products you sell, and how you want to track rewards, there are a few tried-and-true models that work well for small markets:
- Point-based: Shoppers earn points with every purchase, which they can then redeem for discounts or free items.
- Example: An international market gives one point per dollar and offers $5 off after 200 points.
- Stamp or punch cards: Customers get one stamp per visit or set amount spent, with a clear reward after a fixed number.
- Example: A butcher shop gives a free pound of sausage after 10 stamps.
- Visit-based perks: This program encourages repeat visits even for small purchases.
- Example: A fish market offers a free crawfish boil starter pack (with spices, lemons, and garlic) after five visits.
- Member pricing or digital coupons: Registered shoppers get exclusive offers each week.
- Example: A produce market shares digital coupons like $1 off seasonal berries or $2 off a salad kit.
It’s helpful to weigh these program types against how your shoppers already behave. There’s no need to start from scratch or invent something flashy — most successful loyalty programs keep things straightforward, consistent, and tie rewards to familiar patterns.
Related Read: Grocery Marketing: 5 Ways a Customer Loyalty Analysis Should Influence Your Strategy
Here are some tips when choosing a format:
- Keep it simple. Many shoppers prefer a punch card or receipt-based system over an app or login.
- Make the reward worth the effort. A freebie after 10 visits is more compelling than $1 off after 50.
- Tie the perk to familiar habits. For example, if most of your customers shop weekly, reward every fifth visit or offer monthly specials.
Once you’ve decided on the type of program that fits your store, the next step is to build it out with clear goals, meaningful rewards, and the right tools to support it.
How To Start a Loyalty Program for Your Market
Knowing what kind of program you want is a great first step, but it’s the setup that determines whether it works long-term. Without a solid plan, even the best ideas can fall flat.
Here are six practical steps to help you design and launch a loyalty program for your market that keeps customers coming back.
1. Set a Clear, Measurable Goal
Many loyalty programs fall short because their goals are vague or unrealistic. Saying “get more repeat business” sounds good, but it’s too broad to guide your decisions or measure success.
Instead, your goals should be specific, measurable, and tied to actual customer behaviors you can track.
Using the SMART framework can help create goals that are:
- Specific: Define exactly what you want to achieve (e.g. increase weekly visits).
- Measurable: Use data or metrics you can track through your POS or sales reports.
- Achievable: Set targets that fit your current business size and customer base.
- Relevant: Link your goal to a meaningful outcome, like increased revenue or reduced waste.
- Time-bound: Set a deadline or timeframe to evaluate progress (e.g. within three months).
Clear goals give your loyalty program direction and make it easier to design rewards that truly motivate your customers. They also provide a way to assess whether the program is working or needs adjustment.
For example, if your goal is to increase visit frequency, you’ll want to focus on rewards that encourage customers to return sooner rather than later. If your goal is to raise average spend, your rewards might target higher-value items or bundles.
Here are some practical examples of loyalty program goals for markets:
- Increase visit frequency: Encourage biweekly shoppers to start coming weekly within the next 90 days.
- Raise average order value: Motivate customers who spend $12–$15 per trip to reach $20 or more within two months.
- Move overstocked or seasonal products: Clear imported pantry items or fresh herbs before spoilage, targeting a 20% reduction in waste this quarter.
It’s important to avoid setting goals that are too broad or too many at once. Overloading your program with multiple targets can dilute its impact and confuse both customers and staff.
Start by choosing one or two goals that matter most to your business right now, then revisit and refine them as you collect data and learn what works.
2. Choose the Right Format
The best loyalty programs work because they feel like a natural extension of how your customers already shop. Instead of guessing what might work, pay attention to what’s already happening in your store and let those patterns guide your setup.
If your shoppers:
- Buy the same staples every weekend, try a punch card tied to product categories (e.g. “buy 10 pounds of sausage, get one free”).
- Stop by midweek for quick items, try a visit-based program that rewards frequency, not basket size — like a bonus after five trips in a month.
- Stock up during sales or holidays, try a point-based system where larger purchases earn more rewards over time.
- Shop more when there’s a timely deal or recipe idea, try digital coupons tied to weekly email offers or seasonal meal kits.
You don’t need to overhaul customer behavior — you just need to build a reward around what’s already working. Start with the habits you can see in your sales data, then test a format that makes sense for your inventory and staff.
3. Set Up Enticing Rewards
A loyalty program only works if the reward feels worth it. These rewards need to strike a careful balance between the cost to you and the perceived value to the customer. If it’s too small, it won’t move the needle. If it’s too expensive, it won’t be sustainable.
Here are some ways to keep your rewards compelling:
- Match your average basket size. If most shoppers spend $30 per visit, a $5 reward after five trips still feels like a meaningful payoff.
- Stick with familiar items. If your market serves a loyal community, offer products that align with their regular shopping habits and cultural preferences.
- Rotate with the season. In summer, offer free spice blends or specialty marinades for grilling. In winter, shift to perks like slow-cooker soup mixes or discounts on seasonal beverages.
- Use POS data to guide you. Look at items commonly purchased together or rebought. These are great candidates for low-cost, high-value rewards.
You might already have ideas for rewards in mind, but it’s worth taking a moment to run a quick financial check to make sure your perks actually make sense for your business.
Here are a few quick ways to double-check your rewards:
- Look at margin, not retail price. If your average basket is $20 and you’re giving away a $5 item, make sure the cost to you is lower, ideally under $2.
- Calculate break-even thresholds. Will this reward generate enough additional sales to offset the cost? (e.g. If you give a $5 item after five visits, will those extra trips bring in more than $5 in net profit?)
- Target items with high perceived value but low cost, like store-brand pantry staples, seasonal produce overstock, or sample-size specialty goods from distributors.
- Tie rewards to overstock or slower-moving inventory to improve cash flow while giving customers something valuable.
The best rewards feel valuable to customers while staying manageable for your margins. If you’re unsure about the actual cost of a perk, analyze your costs and potential returns before officially launching it to the public.
Related Read: Why All Grocers Need Customer Loyalty Software
4. Train Your Staff To Explain the Program
A loyalty program only works if customers join it, and that all starts with your staff.
Train your employees to answer common questions like how to sign up, what the program entails, and all relevant benefits.
Here are some ways to help your staff drive signups and engagement:
- Start with the benefit: “You’re one visit away from a free pound of sausage” works better than “Do you want to join our program?”
- Ask for contact info early: Don’t wait until after payment — make it part of the normal flow.
- Practice redemptions in your POS: Staff should know how to apply rewards without holding up the line.
- Post a cheat sheet at each register: Include sign-up steps, FAQs, and the current reward.
- Roleplay common questions: Quick answers like “It’s free — we just use your phone number” go a long way.
When your staff actually knows the program’s perks and how to walk folks through the sign-up process, more customers will say yes. And the more customers sign up, the faster you’ll see results.
5. Track Customer Activity With Your POS
You don’t need an expensive custom app or a full tech overhaul to run a loyalty program. If your POS system can collect phone numbers or emails at checkout, that’s usually enough to track purchases, reward repeat visits, and pull sales reports.
Helpful POS capabilities for loyalty programs include:
- Supporting loyalty cards to simplify rewards tracking and keep your store top of mind for customers
- Customizing customer pricing to apply markups or discounts for specific shoppers, including wholesale, retail, and loyalty rates
- Adding and editing customer information from the register to keep contact details accurate and up to date
- Integrating with marketing platforms like customer relationship management (CRM) tools, email services, and SMS providers to support promotional campaigns
- Generating reports that track customer visits, total spending, and bestselling products
If your current system doesn’t include features to support your market’s loyalty program or makes it difficult to set up, it might be worth looking into POS platforms built for independent grocers.
6. Review & Adjust Promotional Efforts
The first draft of your market’s new loyalty program probably won’t be perfect, and that’s okay! After a couple of months, you can refine your strategies based on real performance data.
Start by asking a few questions: Are people signing up? Are rewards getting used? Are the same handful of shoppers redeeming everything?
Then, use metrics like these to determine what’s working:
- New sign-ups: How many people joined since launch?
- Repeat visits: Are shoppers coming back more often?
- Average order value: Are purchases getting bigger?
- Redemptions: Are shoppers consistently claiming rewards?
- Top rewards: Which discounts or free items were most popular?
If engagement is low, try adjusting one aspect of the program, such as the reward, format, or how staff explain it. Even a minor change, like offering the reward sooner or switching which items you promote, can have a significant impact.
How To Start a Loyalty Program That Works
Knowing how to start a loyalty program that fits your market’s unique customers and products gives you a clear path to building lasting relationships and driving consistent sales.
And having a POS system that supports your program, from collecting customer data to tracking and managing rewards, makes all the difference. Without the right tools, even the best-designed program can stall before getting off the ground.
To create an effective loyalty program, start with a platform designed for independent markets. Schedule a free demo with Markt POS to see how an industry-specific POS system can support your goals, simplify tracking, and help turn first-time shoppers into regular customers.
by Luke
