Drive More Business With Loyalty Cards
by: AlDuggan |
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With the economy tightening the belts of consumers and merchants alike, more and more businesses are reducing expenses on important client and sales driving initiatives like promos, print ads, direct marketing and attending trade shows. Small businesses are finding it increasingly difficult to bring in and maintain active customers. This leaves merchants with a challenge: how to send the message that they want and need customers. One solution that many businesses may have overlooked is loyalty card marketing.
Since gift cards were one of the most-requested gifts this past holiday season, many merchants and retailers are now familiar with their impact. However, what's not as familiar to many small businesses is the impact that a good loyalty card program can produce. With the cost of bringing in a new client or customer often 10 times that of retaining existing customers, it is important to focus on how you can keep your present customer base coming back again and again. This is what loyalty card marketing is for.
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.
One of the most appealing features of a loyalty marketing campaign is its flexibility. Programs can be customized to fit the economics of the business offering it. For example, a furniture dealer, who may deal with larger-ticket purchases and higher margins, may decide to offer a "Mystery Shopper" campaign. With this program, cards are distributed (either through direct mail or other store events) with varying discount values. A consumer's card may include a discount from $10 to $1,000 off their furniture purchase. The card must be presented at the place of business in order for the recipient to determine their card's value.
This promotion is successful because consumers consider it a "game" of sorts that can lead to a substantial discount. Merchants like this promotion because it enables them to strictly control the number of cards with a particular discount amount. And here's a tip: advertise the "range of value" to be, for example, $10 to $1,000, but only create a few $10 cards with $20 being the most popular low-end discount. This way, almost every consumer considers himself or herself a "winner," achieving something in excess of the lowest-valued discount.
For restaurants and bars, a very popular loyalty card campaign involves a free or discounted offering for accumulating "points" on every purchase. For example, a restaurant visitor may earn one point for every dollar spent, accumulating points until a reward level is achieved. The program can be set to automatically keep track of a consumer's purchases and then notify that consumer they have reached a reward level by printing the information on their receipt. Once a customer receives a free lunch or haircut or another pair of shoes at half price, they immediately form a bond with your business that competitors will find very difficult to break.
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.
Make sure your loyalty program reaches your customers. Good things happen to those who properly promote their campaigns. Give your loyalty program play in your newsletters, emails and on register receipts. Build awareness by using table tents, posters and other in-store and point-of-sale display pieces. Take advantage of those communication vehicles and advertising space you already have established.
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.
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About the Author
Al Duggan is an expert in loyalty cards and the VP of Business Development for Valutec Card Solutions, the nation's largest provider of gift card programs to small merchants. For more details, please visit their website today.
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