I'm planning on increasing my layer cake prices this month. As a means of rewarding existing customers (and to soften the blow of the increase a bit), I intend to create a customer loyalty program. What I had in mind was to offer an incentive (probably a % or $ off their next order) to existing customers for referring a customer who places and pays for an order. Also, I was thinking about allowing customers to earn free or discounted cake (or maybe a free birthday cake) by accumulating points based on either what or how much they order each time.

I keep my customers and orders in Cake Boss, so it is easy for me to keep track of my orders. Because I have some customers who regularly order from me, I plan to include some or all of their prior purchases to reward their loyalty.

Has anyone done anything like this for their business or participated (as a customer) in a similar program?

How much business do you have? If you are already running at capacity then a loyalty program is not necessary, but if you have idle time it might be worthwhile.

For the incentive I would lean towards providing free product (something like X free cupcakes per $Y business referred) instead of a discount.

Jasonkraft, thank you for the reply. Since I'm doing everything myself at this point, it certainly feels like I'm "running at capactiy". However, since I'm looking toward the future, I'm interested in building a larger client base and, eventually, hiring help to increase my business.

I will certainly consider your suggestion about giving free product instead of a discount. I think that's a good way of getting people to take advantage of their "reward" quicker, so I don't have to keep track of discounts.

I would still like to hear from others. Anyone ever done this?

A little OT, but in college I worked in the photo center of a store that did a card program like you talked about. P-I-T-A to the extreme. People would lose them and want them replaced, come back weeks later with a receipt wanting credit, the employees handwriting was either illegible or forged, etc. I'm not familiar with the software you have, but if it's something you can keep track of yourself then I would. I'd hate for it to turn into more of a headache than incentive. HTH

We have not participated in a loyalty program, but have recently talked about a customer reward to drum up business in the slow winter months. I think we will probably offer something free (cupcakes, cookies, etc.) instead of offering a % off. After reading this, I can see where the % off route may be a PITA and that something free adds instant gratification to an order!
On another topic, do you feel that the Cake Boss software is wothwhile? It isn't expensive, but is it beneficial to you? If so, how? We use Quick Books right now for all our orders. We do bread too, so we already have a pretty large customer base. The one thing that annoys me about QB is that I can't track an individual customer's pattern without knowing their previous invoice number. We decided to call all of them "cash customers" because adding everyone as an individual would make the customer base so huge!
Thanks in advance for the input and good luck with the program!

HaydenSC, sorry for the delay in responding. Regarding Cake Boss, I have been using it now for about 3 years and am very satisfied. I've never used Quick Books or any similar program for my business, so I can't compare it. I can tell you that CB allows you to create an individual record for each of your customers and add individuals sales to each record, allowing you to sort and generate reports by customer.

I recall that before I purchased it, I was able to check out a demo to see its features and how it worked. You might want to check to see if that is still an option.