Advertising

Using Loyalty Cards to Grow Your Business

| Print |

E-mail

Written by Al Duggan

Sunday, 20 July 2008

by AlDuggan

Small businesses are facing a challenge in today's economy. As businesses tighten the purse strings on budgets, critical items like advertising, promos, direct mailing and trade shows are getting cut back. Missing these initiatives can take their toll in not only driving new customers but increasing activity from current ones. The problem becomes how to effectively tell clients and customers that they are wanted and needed. One solution to this that may have gone under the radar is the power of loyalty card marketing.

The concept of adding a gift card to your business has been well-embraced, as gift cards were the most asked-for gift item of the past holiday season. What many small businesses may not be familiar with, however, is the strong results you can see with a loyalty campaign. It may cost up to 10 times the expense to add a new customer than it does to retain a current one. With that in mind, more effort should be focused on keeping your current customers returning. Enter loyalty card marketing.

Loyalty card marketing has simple objectives at its core: to demonstrate additional value to existing customers and to motivate occasional visitors to a business to come back. A loyalty program that is properly crafted will not only provide additional value to the consumer, but it allows the merchant to gain access to valuable data they can use to increase sales and revenues. In essence, the merchant gains visibility into the purchase patterns of their most prized patrons.

Flexibility is one of the more attractive features of a loyalty program. Campaigns can be designed according to economics of the merchant providing it. Take a furniture retailer, for example, with customers who buy bigger-ticket/high-profit items. They decide to launch a "Mystery Shopper" promotion that gives their customers cards that range in value from $20 to $800 off the customer's next purchase. They mail the cards to its clients, and clients must come to the store to find the dollar amount on each card.

And instead of making the $20 range the most frequently delivered prize, the furniture seller makes $30 the most-rewarded level. This allows consumers the feeling of winning something of increased value. The program succeeds because consumers won something of value and earned a discount, and the furniture dealer pushed sales and had complete control of the amount and type of discount their clients received.

A restaurant may offer its loyalty-card rewards at a level and pace on an entirely different scope by using a "point" system. Every patron can earn a point per every dollar spent in the restaurant. Purchases can be automatically tracked in the program and customers notified whenever they earn a reward level. This information can be printed onto their receipts. As the patron earns his or her free dinner, you develop a stronger bond with this consumer. Loyalty and return visits increase along with the incentive to earn more prizes. This bond becomes increasingly difficult for your competitors to chip away at.

It's also important to keep your program simple. By making the above program one point for one dollar spent, the restaurant is able to keep the message clear to both consumers and employees. The simpler the design, the easier it is for your employees to explain and promote.

Whichever type of loyalty card program a business decides to use to drive sales, make sure consideration is given to its promotion. Advertise it on your receipts; communicate about it through your email list or mailings; and give it some impact by putting point-of-sale pieces at your business. Make it a point of discussion for your employees when they ring up a sale. Loyalty cards and gift cards are frequently an impulse purchase. Using a variety of displays, table tents, posters and other advertising tools will drive sales and revenues.

To survive and thrive in a challenging economy requires you to look beyond your normal mode of business. These adverse times, however, may give rise to opportunity. Loyalty marketing can prove to be an effective tool with more and more consumers looking for value and savings. Tap into that growing demand by developing a loyalty card program. And if you already have a loyal customer following, give them more reason to stay with you and less reason to go elsewhere.

About the Author:

Al Duggan specializes in loyalty cards and the Vice President of Business Development for Valutec Card Solutions, the country's biggest provider of gift card programs to small businesses. For more details, please visit their website today.

Only registered users can write comments.
Please login or register.