Every small business experiences seasons. Some seasons, the cash comes rolling in the door, and other seasons ... well, not so much.

That’s one of the reasons many small-business owners struggle with keeping their cash flow constant. When the season is dry, it can be tough to stay afloat.

One solution to smoother cash flow is to offer a continuity program to your customers. It’s an easy way to keep the cash coming in on a regular basis—without so many ups and downs—and provide a great service to the people who love doing business with you.

Not only that, but if you're continually selling to repeat customers, then your cost to acquire a new customer is reduced. According to Kinesis, depending on the industry you're in, a 5 percent increase in customer loyalty can translate into a 25 to 85 percent increase in profits.

Increasing Customer Loyalty

Let’s back up for a minute and talk about exactly what a continuity program is and what types of programs you might want to provide. In its simplest form, a continuity program offers your customers the opportunity to get services or products on some type of regular basis by paying a recurring fee.

Continuity programs come with all sorts of different names. I bet you’ve been in one of these six programs at some time in your life:

“Of the month.” These programs are very popular with product-based businesses. Customers join the program for a recurring, set fee, then once a month, they receive whatever the featured product is for that month. A business can use this as an add-on to existing product sales or it can be the main business model, like the popular Dollar Shave Club.

Subscription. With this type of service, customers get a specific item on a selected basis—monthly, bimonthly, quarterly, twice a year or annually. Amazon has become the master at this with its Subscribe & Save program. It’s a way for Amazon customers to not only get the products they need when they need it but to save money in the process, too. And it benefits Amazon by having regular revenue coming in the door.

Membership. A membership program provides customers with ongoing access to some type of product or service as long as they're an active member. Typically, membership programs are billed on a monthly basis and new resources are added each month to keep customers engaged. These have become very popular in the online services industry for delivering just about any kind of training program. They're also used by gyms or massage therapy businesses to draw in business.

Retainer. Retainer systems have been around forever and are most often used by attorneys and accountants. Customers pay a set amount every month for an agreed-upon amount of services. Those services can come in the form of hours to do specific tasks, or the agreement can outline the specific tasks themselves. This type of continuity program has also become popular with virtual assistants, coaches and consultants with the expansion of the tools and technologies that are now available online.

Inner Circle/VIP. Who doesn’t want to be a business's “most special” customer? This type of program can be a hybrid of any of the above programs, but it's only offered to a select few who meet specific criteria. Programs of this type often garner higher fees than other membership programs.

Loyalty. These programs are very popular among service businesses such as restaurants, spas, hair salons and airlines, just to name a few. Loyal customers who buy a certain number of services get something free in return. Each purchase is tracked, then customers can redeem their points for the item offered.

A Helping Hand

In addition to helping your small business retain customers, continuity programs offer a boost to your cash flow by providing another income stream, one that keeps going all year long. Here are four other reasons it might make sense for your business:

1. It allows you to offer a lower price point for customers. When the cost of an item is spread among more people, it helps you normalize the price, which you can pass on to all your customers.

2. It helps create stable inventory management. Knowing how many units of a product will be sold on an ongoing basis can help your company manage how much stock you have to have on hand. This can also give you better purchasing power with your vendors.

3. It provides good branding and opportunities for word-of-mouth marketing. Making your customers’ lives easier in today’s hectic world normally drives them to talk about it to their friends. By generating free promotions from your brand ambassadors, you'll save money in marketing and advertising.

4. It can lower your delivery costs. For online training programs, creating something once, then selling it over and over again lowers your costs and increases your ROI.

Almost any small business can implement some type of continuity program. Take some time to brainstorm what you could offer to your customers to keep them coming back. And if you’re stumped, just ask them—they may know exactly what they'd like from your business. 

Read more articles and see exclusive videos in OPEN Forum’s special section on Managing Your Money.

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