Small business owners have always had to focus on streamlining and improving efficiencies in order to stay competitive and remain afloat—but what about creating solid competitive advantages by improving the customer experience?

Small business owners strive to provide a customer experience that differentiates them from their competition, but they often feel that they can’t compete on all levels against large national or regional merchants. Loyalty solutions can help level this playing field and are easily attainable for small businesses.

Loyalty solutions can track customer information, including how much is being spent and when customers are spending. Targeted marketing efforts that cater to the exact interests of customers will undoubtedly improve their experiences, increase marketing efficiencies, and ultimately cut costs for the small business owner.

In today’s current economic environment, loyalty solutions become a wise investment and marketing tactic for small business owners and should not be viewed as an additional expense.

Here are suggestions on how to enhance loyalty programs through various strategies and real life applications for small businesses:

1. Real-time rewards, offers, and messaging. Reward loyal customers with instant discounts at the point of sale. Consumers have identified receiving a discount at the point of sale as their most preferred retail reward, according to a study by First Data.

2. Customer relationship management tool. Track the spending behavior of your customers to ensure you always have what they need when they need it. Understanding when your customers are buying and how much they’re spending will move items off the shelf and create better loyalty.

3. Targeted offers and rewards. Offer a wide range of promotions with the right mix. If the current program is a punch card, add discounts to items for card holders on particular days or create "double punch" days on slower business days.

4. Effective customized communication. Communicate with customers via relevant messages, using the communication vehicles they want. For instance, if customers provide their birthday, invite them to celebrate with a special discount on that day. Other vehicles include e-mail coupons, point-of-sale discounts, and mobile-phone messaging.

5. Customer-facing Web site. Provide an additional way to communicate with customers by creating a reward program site filled with special coupons, frequency discounts, and more. Only customers who sign up online can receive these exclusive offers.

Stuart Kiefer is division manager for Loyalty Solutions, First Data, in Atlanta, Ga.