Drive More Business With Loyalty Cards

In today's economic climate, it is getting increasingly difficult for small businesses to gain and retain valuable customers. Many merchants are cutting back on anything they feel is optional, including critical business initiatives like print advertising, promotions, trade show attendance and direct mail. This leaves businesses with a problem: how to effectively communicate to customers that they WANT and NEED them? Loyalty card marketing is one answer that many merchants may not have considered.

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 programs have simple marketing concepts at their core: providing incentive and motivation to your existing customer base to do more business and to provide them with something of added value. An ideally designed loyalty card program will not only give your customers that extra value, but it will also provide you with something of value -- insight into the buying habits and purchase patterns of your best customers.

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.

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.

A very different tactic may be taken by a restaurant which has a different rate of purchase and a different price-point. In this case, a restaurant may wish to develop a reward program using points. For every dollar spent at the restaurant, a point is earned for the consumer. All of this can be easily tracked and automated to print the consumer's point totals and prize notification onto their receipts. As prizes like a free drink or meal are earned and redeemed and the consumer's rate of purchase goes up, the restaurant begins to established a tighter relationship with this consumer -- one that becomes harder and harder for its competition 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.

Regardless of the program a merchant chooses to increase their marketing impact, one simple rule always applies -- good things happen to businesses that advertise their program. This is especially true when launching a new program or revising an existing one. Take the opportunity to shine light on your new program by placing a notice on cash register/terminal receipts; discuss your program in newsletters, emails and other customer communications. And most importantly, create awareness by placing point-of-sale materials in your place of business. Gift and loyalty cards are often an impulse buy, and using customized posters, displays, table tents, and other merchandising tools will impact sales.

It is difficult to survive in such a challenging economic environment, but often opportunities can arise from adverse conditions. Loyalty marketing is no exception. Consumers are looking for value anywhere they can find it. If you already have a loyal customer base, you are fortunate. Take it one step further and give those loyal customers another reason not to shop elsewhere.

About the Author

Al Duggan specializes in loyalty cards and the Vice President of Business Development for Valutec Card Solutions, the country's largest provider of gift card programs to small merchants. To get additional information, please check out their website today.

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