On average, loyal customers spend 60% more per transaction, buy 90% more often, and are 5x more likely to return to your business. This statistic alone should be enough to convince you that you need a loyalty program in place. But, we don't mean just any loyalty program. As a business owner in 2019, you should avoid using punch cards for a loyalty program because it'll hurt your brand.
You might be questioning this if you've had some success with punch cards over the years. But, i'm going to give you a few major reasons why loyalty punch cards will hurt your brand.
Thing of the Past
First and foremost, punch cards are a thing of the past. In today's age, you should be pleasing the overwhelming majority of consumers that prefer convenience. And that overwhelming majority of consumers just happens to be millennials, a.k.a the convenience generation. In 2018, millennial's collective purchasing power exceeded $3.39 trillion. That's a whole lot of money. And because of this, wouldn't you want to cater to the population that is bringing in such high revenue?
It might seem scary to ditch something that you've been using for quite some time. But, 56% of CEOs said digital improvements have led to revenue growth, which means you can feel comfortable knowing that getting rid of your punch cards won't harm you.
When you decide to finally get rid of your punch cards, consider doing some research on different digital loyalty programs before signing a contract. There are many loyalty programs out there that claim to be the best and attract the most customers.
Not Environmentally Friendly
You have to know that I was at least going to mention the fact that printing out these paper cards are extremely unfriendly to the environment. Let's think about this for a second, you have to print out sheets of quality paper with nice ink just to cut them up and have customers lose them every other week. Think about the amount of times you've had to either 1. replace a lost card or 2. issue a new card to someone that finishes theirs. What happens to the lost or used cards? They just become unnecessary trash.
Not to mention that you're spending a lot of money over time on printing those cards. If you want a card that's sturdy and is readable, you're probably going to a place like Kinkos to get them "professionally" printed out. And if you're not, then why do you even bother having pieces of paper for punch cards in the first place? So unprofessional!
Anyways, with the ever-growing awareness of being environmentally friendly, you want to appeal to customers that truly care about a businesses carbon footprint. And just think about it this way, you're saving money anyways if you move towards a free digital loyalty program.
Can't Reach Customers Outside of Your Business
These days, digital loyalty programs come with features that allow you to tap into a network of customers to market to them. This might be a social network or the option to run email marketing campaigns. And don't get me wrong, it's great (and typically more profitable) to have loyal customers than to constantly be getting new ones. But, a good business owner will always be looking for ways to attract new customers, while keeping loyal ones around.
Lets' say that after months of developing a few new menu items that you want to get the word out to bring in new customers. How would you go about doing this? Would you post on social media in hopes that your loyal customers will spread the news? Would you spend money to create flyers to post on busy streets? What if I told you that there's a much easier way to do this? Yes, you probably guessed it, a digital loyalty program.
Unlike punchcards, you would be able to access that network of customers i'm telling you about. Customers who eat at restaurants or shop at stores similar to yours would receive a notification or suggestion to check out your business, or in this case try your new menu options. Now, you're reaching hundreds, if not thousands more people, all without needing to use old-school marketing techniques.
No Data Collection or Analyzing
Being able to collect data about your customers is going to help you with your KPI's (key performance indicators). The only data you can collect with a punchcard is how many free items you've given away. And get this, you can't even accurately track how many times a customer has visited your business because if they forgot their punchcard, you have no efficient way of tracking that visit.
A digital loyalty program allows your customers to log visits on their phones, and if by some weird chance they forgot their phones, you would be able to log it yourself! Essentially, there's no reason why you wouldn't be able to add points for a customer visit.
Another plus to being able to collect data is that you can tailor promotions and rewards to customers who have only visited your business once. Research shows that only about 27% of first time customers come back for a second visit, while second time customers return at a 70-80% rate. Being able to lockdown a customer to come back a second time is going to be great for your business.
Harder to Run Special Promotions
All customers love deals and promotions, and they especially love when they feel they're one of the few receiving them. With a digital loyalty program, you'd be able to run special promotions for loyal customers who fit criteria like a certain amount of visits, whether it's their birthday, or if it's their first visit with the loyalty program. You can even offer double or triple point days for customers, which again, would be hard to track with punch cards. Essentially, with punch cards, there's virtually no way to create tailored promotions to your customers. (And if there is I would love to know!)
Overall, there is technically nothing so wrong with punch cards that you need to feel embarrassed about using them. Maybe you're a locally owned ice cream place that is a town treasure and you feel that having a digital loyalty program would throw off the theme. While I can't guarantee that every customer will love the idea (especially since there are people who don't want to accept that technology is virtually unavoidable) I can say that they appeal to the majority of consumers.
By ditching your punch cards and upgrading to a digital loyalty program, you're making it easier on yourself, and easier for customers to receive rewards for being a loyal customer. Now, tell me why you wouldn't want to do that!