How to increase revenue and promote customer goodwill

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01 Sep

How to increase revenue and promote customer goodwill

How small brick and mortar stores can significantly increase incremental revenue & promote customer goodwill.

Scott Goodwin

Acquisition vs. Retention

Before we begin we must first understand two concepts. Acquisition marketing and retention marketing. Acquisition marketing refers to the efforts a business engages to gain and sell to new customers while retention marketing refers to the efforts a business engages to keep and sell to previous customers. 

Your Marketing Budget is Misallocated

Brick and mortar businesses spend almost all, if not all, of their marketing and advertising resources on acquisition and little to none on retention. That's a travesty, but understandable. Acquisition marketing is really the only type of marketing offered to brick and mortar businesses. The marketing and advertising infrastructure in towns is centered around acquisition. Sales people hawking radio and TV spots, newspaper ads, magazine ads, local sponsorship's, etc. are the only people that come around selling marketing and advertising. None of that has anything to do with retention, but only acquisition and branding. 

This is a big problem for small business because acquisition marketing is very expensive as it costs 6 to 7 times more to acquire a new customer than retain an existing one. Don't misunderstand though. Acquisition marketing is important, but at some point a business needs to better balance acquisition and retention as increasing customer retention rates by just 5% can increase profits by 25% to 95%. 

What to Do

What should be considered for a brick and mortar stores wanting to engage in retention marketing to drive incremental revenue and promote customer goodwill?

Loyalty Rewards Program

Customer Communication List

Birthday Club


Loyalty Rewards

A loyalty rewards program is something everyone is familiar. Spend a certain amount of money, or visit a store a certain number of times, and soon you're rewarded for your loyalty. This is truly a no-brainer for most any brick and mortar business. A loyalty program demonstrates to customers you appreciate their patronage which cultivates goodwill towards your business. Not to mention the incentive for your customers to keep coming back to earn their reward.  

A loyalty rewards program can be as simple as a paper punch card system, or as complex as an app for scanning QR codes to collect points that must be converted into dollars which then must be quickly used before they expire. 

For a small brick and mortar business a more simple program is better than a more complex one. If it's complicated for you, or your customers, then it won't be used. If you must spend more than 5 seconds explaining your loyalty rewards program then it's too complicated. 

Customer Communications

Online stores excel at capturing and leveraging a communications channel with their customers and so should brick and mortar stores. Online stores encourage customers to join their email list at every opportunity. That's smart. You should be smart too. However, as a brick and mortar store you can be even smarter. 

Unfortunately, email is not a particularly potent communications channel. Commercial email has only about a 25% open rate. Basic math tells us that's bad. However, email addresses are easy to capture online and sending email is cheap so I guess there's that. I'm not saying abandon email as a communications channel. I'm just saying understand the limitation and how it may adversely impact your ability to effectively drive incremental revenue. 

As a brick and mortar store you can do MUCH better. Develop a text message list. Rather than spend time and energy building a less effective email list, spend those resources creating a more effective text messaging list. The below statistic alone should convince you. 

Text messaging has a 95% open rate within 3 minutes of delivery. That's effective and efficient. 

With great power comes great responsibility though. You can't blast your customers with constant text messages. However, they'll appreciate and respond to quality messages that provide value to them. Having the immediacy of text messaging allows you to run flash sales for list members, provide a members only early peek at new inventory, incentivize a lunch crowd on a rainy day, or a myriad of other opportunities. It only takes a little creativity to drive that incremental revenue from this powerful communications channel. 

Birthday Club

Creating a birthday club is another no-brainer program that virtually every brick and mortar business should engage. A birthday club promotes customer goodwill and increases incremental revenue without having to do any work at all. 

If you have a restaurant, you're definitely leaving revenue and goodwill on the table if you don't offer a birthday club. 55% of all Americans eat out on their birthday, and an average birthday patron generates $78 in revenue per table. 

The only excuse for not offering a birthday club is that until now there was no easy way to create and automate the process. A solution is provided at the end of this article. 

Fun and Games

Lastly, gamification is a tremendous way to drive incremental revenue and promote customer goodwill. Everybody likes playing a game, and the thought of winning something for nothing is too much to pass up.

Think about a sweepstakes program.

You're not in the business of giving things away so a sweepstakes may seem an unlikely way of generating incremental revenue or promoting customer goodwill, but hear me out.

Let's say you get 500 entries from your $25 gift certificate sweepstakes promotion. At the end you'll have one winner and 499 losers. Let's now turn those losers into winners to create positive goodwill. At the same time you have the opportunity to generate significant incremental revenue too.

Send a message to the 499 informing them they didn't win the grand prize. In that same message you're going to thank them for playing by offering a 10% off coupon, but it expires in 3 days.

You have now converted 499 losers into winners which promotes positive goodwill! Not only that, but a certain percentage of those 499 will visit your business within 72 hours to take advantage of your offer. This generates incremental revenue for you over a short period of time. They win. You win. Everybody wins. 

Buy in is Critical for Success

They only way any of this works though is if you make it a priority and impress upon your employees to do the same. Every customer that walks through the doors should be made aware of your customer appreciation program. The more customers you have participating the more value that can be had. 

There's Good News and Bad News 

Now you have a road-map to increase incremental revenue and promote customer goodwill for your brick and mortar business. Fantastic. How do you implement these suggestions in a way that is simple, automated, and affordable? Well...

There's good news and bad news.

You can invest in each program piece by piece, but you'll end up with a mish mash disparate system. With multiple vendors you'll have multiple logins, separate analytics, several new bills each month, etc. The other alternative is an all-in-one system. We'll look at both. 

Disparate Systems

Google “loyalty rewards program” and you'll find many willing to sell you anything from an old school paper punch card system to Rube Goldberg-like complex systems. Some POS have a loyalty rewards system built in so that could be an option. There will almost certainly be a monthly fee with any option.

Google “text message marketing” and again you'll find many willing to sell you their services. You'll also find that pricing is all over the map and it's never clear as to why.

Google “birthday club marketing” and you'll sadly find little to nothing. What a shame too as a birthday club checks so many boxes for creating goodwill and delivering incremental revenue. To be fair, the option for a birthday club is built into some loyalty systems. Unfortunately, if all you want is to operate a birthday club you would be pretty much out of luck.

Goolge “sweepstakes marketing” and you'll find a few offerings. They're geared mostly towards operating a sweepstakes online which is not exactly helpful to a brick and mortar business. They also tend to be a little pricey. 


A comprehensive system that includes loyalty rewards, communications, birthday club, and gamification is the choice that makes the most sense.

Unfortunately, there is a YUGE problem, but also a FANTASTIC solution.

Only a handful of comprehensive retention marketing solutions are on the market. Oddly enough, only one seems appropriately priced for small brick and mortar businesses. The following offer solutions priced between $200 and $400 per month. Fivestars. Belly. Tapmango. Spendgo. Feel free to google them for more information. 

Shameless Plug

Nlocation is the only platform with no monthly fees and pay as you go. Nlocation is almost entirely automated and includes a loyalty rewards system, birthday club, text message marketing, and a sweepstakes program. Nlocation does not require you to lease proprietary hardware and is modular. You can offer every program, or pick and choose what you want to use. Nlocation also offers a completely free trial to test it for yourself. We think you'll be impressed. 


Customer appreciation / retention marketing is something all brick and mortar businesses should engage. The benefits are absolutely worth the effort. Whether you choose to offer all that's available, or just one program, is up to you and what makes sense for your business. It would behoove you to allocate some resources to it though. It's an easy way to increase customer goodwill and generate significant incremental revenue.