A Loyalty Punch program is our market the second most popular loyalty program. Worldwide this loyalty program is the most popular marketing. It is used by the smallest to the largest businesses worldwide. So a review here is warranted.
Commonly, customers get loyalty cards. The store marks these cards after every purchase by the customer, and after earning enough marks, the customer receives a reward. A typical example is a customer entitled to a free coffee after purchasing ten coffees in a cafe. To make it work, you need a flagship product. I have seen books, pet food, gift cards, purchases over an amount, etc., used instead of coffee.
The program discounts loyal customers while encouraging them to interact more with your shop. This makes it more likely that they will spend more in it. This increase sales overall. At the same time, one-off customers pay full price, so protecting the shop from unnecessary discounting.
The flagship product should ideally be:
) A product high in demand
) Have an excellent companion sale
) Decent profit as you are giving away a margin.
We recommend that you make a program with a reward after 12 marks.
* When the person first comes into the shop and buys something, they get one mark free for joining the program. They then get a mark for their first purchase. So they are starting with two marks. This gives them the feeling that they are getting closer to their reward, as now they are 17% (2 marks out of 12) through it.
* This is important as you need to give your customer a feeling that the reward is achievable.
* Each purchase gets them another mark.
* Once the card is filled, they get their reward. Then they get a new card with one mark credited for rejoining the program. They get another mark for the free offer they redeemed. This overcomes customer feeling that the reward is unachievable as now they are at 17% again.
* Have an expiry rule, so customers must collect the required total within a year. The unused reward marks can be a long-term problem.
The cost of such a program is 10% assuming it is used; if it is not, it costs nothing.
Finally, we recommend you issue a card to the customer and keep track of it on your POS Software which is provided free because:
) Manual punch cards are easy to cheat, and there is no tracking to prove it is being cheated.
) You can market to these people if you have their email accounts. This is said to be worth 2%.
Overall let us run through the advantages of such a program.
- It is quick to set up as it is in your software now.
- Simple to administer
- This scheme has a proven track record.
- The rewards to the customer are tangible, concrete, visible, and measurable
- It works over time, so a customer is incentivised to return.
- The reward directly supports the shop
- It is considered monetary, encouraging people to spend more in the shop. They come and buy something. They often will buy more.
- The value to the customer is more than the shop as the goods purchased with the discount voucher have a margin.
- The customer sees the reward as valuable and practical rewards as it's what they already buy.
- You get a loyalty program mailing list to market to your clients. Using something like Mailchimp, which is free. You can drive more business to your shop.
Give it a try.
