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Benefits of Loyalty Cards

Posted by rafael on January 29, 2013 in Business Finance

Loyalty cards are not a new phenomenon and have been around for over 30 years. However, they are becoming more and more popular, both with consumers and businesses. Today, around 88% of people have at least one card and 29% hold five or more. As a retailer, what are the benefits to you of loyalty cards?

 Getting Something Back

 Consumers are becoming increasingly conscious of the amount of money they’re spending every month. Even if they’ve not been too badly affected by the recession, they’re still looking for ways in which they can cut back or gain something extra. Therefore, holding loyalty cards for stores they visit often can offer them great advantages.

Reward schemes usually follow one of two forms. There are a number of retail outlets, including coffee shops, which offer simple reward schemes, often in the form of stamps. With these you usually get a free product, for example a cup of coffee, for every certain number you buy. So you might receive a free drink for every six you buy or you might earn points for every transaction you make, which you can then redeem against products in store. These are quick and simple rewards, which customers can use to treat themselves.

Other stores work with partner agencies through which members can also redeem the points. With these schemes you usually receive a statement every quarter showing how many points you’ve accumulated. You can either redeem these straight away or save them towards a larger offer. Many schemes have an online section where you can simply view your points and spend them on rewards.

Loyalty Cards

Loyalty Cards

 Targeting Your Customers

 For businesses, having a loyalty scheme is a great way of attracting and retaining customers. The ultimate aim is to increase sales by driving customers into your store instead of your competitors’. If you offer consumers a loyalty scheme they feel more valued as a customer and that they’re getting something back in return for their business. This in turn leads them to shop with you more regularly. Those who use the loyalty scheme may also recommend it to friends and family as a way of saving money, drawing in new customers to the store.

One of the key advantages of loyalty cards is their marketing potential. Through customers scanning their card at the checkout, you can track exactly what they’re buying, how much they’re spending and how often. By analysing this data, you can then target your marketing more specifically to them. For example, if their data shows they regularly buy baby products, they would obviously appreciate offers and discounts on associated lines, such as nappies, baby food or family related deals. This type of marketing makes them feel that you understand them and are not simply bombarding them with offers.

Loyalty card schemes are here to stay, as they hold considerable advantages for both customers and retailers. With the changing face of technology, businesses may start to move away from the traditional card based schemes as smartphone apps become a more convenient option.

Guest article by Jamie Merry who is writing for Loyalty Pro. For more info click here.

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