LOYALTY CARDS, REWARDS CARDS, PUNCH CARDS:
Success Tips & Concepts

Everyone's common sense tells them that it is critical for any size company to stand out from their competition -- especially if they are a small business or franchise owner and especially so during a tough economy. Your overall objective in doing a loyalty, rewards, frequent buyer punch card should be simple: TO INCREASE SALES.

The value of customer loyalty rewards programs is hotly debated for big corporations. However, for small retail and service related businesses, loyalty programs are most often an effective and inexpensive sales tool in increasing traffic and sales. A well designed loyalty program has been shown, in many studies and surveys, to increase sales within minimal overhead cost with an increase in the degree of customer loyalty.

One of the key ingredients of success in using customer rewards loyalty cards is making the program simple and clear to the end customer and that it does not take too long for the customer "to cash in" and receive the benefit you are offering. Avoid weasel clauses as much as possible as they taint the overall IMPRESSION of the program's value to end consumer.

There are several different types of loyalty rewards punch card programs that seem to work well for small businesses or local franchises --

• FREEBIE after reaching some pre-determined purchase level. Example: Buy 9 get 1 free.
• CASH REWARD after reaching a purchase level. A credit after filling the rewards card usually results in the customer buying something they would not have purchased on their own dollar -- which increases sales as well as loyalty.
• DISCOUNT either up front (10% off card), or various other discount possibilities after filling the punch card ($10 off next purchase, 20% off next purchase, or some other scenario which would make the average person feel good). This concept works very well in the Good, Better, Best client scenarios (Gold Card, Silver Card, Platinum or Diamond Card holder.)
• UPGRADE REWARDS -- for the most loyalty, giving some kind of an upgrade product or service once they have reached a purchase level. For salons, this might be some nail polish or hand massage after having spent $x. For coffee / ice cream establishments, this might mean getting an upgraded order (small to large) or an add-on product (which also introduces the customer to a higher profit margin product that s/he might not have tried on their own dime).

Customer rewards or loyalty cards (also known as reward cards or punch cards) are an excellent way to stand out from your competitors and are easy to start. You don't need plastic cards (at about a buck apiece they are too expensive for small businesses). If you want to physically punch the cards, you need a specialty hole punch with a unique shape to discourage fraud (at Business Card Source, we have many "discontinued by manufacturer" punches -- which makes the likelihood of fraud less than punches that are for sale at any retail establishment). If you order UNCOATED cards, you can write on the surface of the card. If you order Color front and black/white backs, you can write on the back of the card.

Other items to consider: When a customer is carrying a rewards loyalty punch card in their wallet it is an on-going advertisement of your business. The card color should be associated with YOUR business so that the card stands out from your local competition. (If the coffee shop on the corner's card is yellow, yours should NOT be yellow.) When someone opens their wallet, others see and notice COLOR. You WANT others to say things like "Oh, you go to XYZ store -- or What is THAT?"

DO OFFERS THAT MAKE A DIFFERENCE / MAKE YOU STAND OUT!

Let me explain by example. Sally's coffee shop is offering buy 9 coffees and get 1 free. You are a short distance from Sally's and you also have a coffee shop. Should you duplicate Sally's offer? Should you cut into your profit margin by bettering Sally's offer along the lines of buy 8 and get the 9th free? Or should you use a returning customer loyalty reward to actually increase your profit margin? What if your offer was buy 9 coffees and get a (fill-in-the-blank) upscale drink for free... thereby introducing a higher profit margin product to a customer that may not have been as inclined to buy it because they never had one before? Yes, your offer is now better than Sally's AND you have the potential to turn a customer on to a higher profit margin product with the hope that the customer will like it and buy the higher profit margin product more often instead of "just" a coffee.

The key ingredient to success is to KEEP IT SIMPLE, keep the customer coming back (or keep them in your establishment longer), and reward them for a particular behavior you want increased.

CASINOS, who can afford expensive marketing campains, use the concept of GOOD, BETTER, BEST (clients)... regular card holders, gold card holders and platinum card holders. Monster Cable's owner is a marketing genius that took a rather bland product that came free with a stereo system and turned better sound quality cables into a huge success using this very simple concept and not only gained a huge marketshare but gained control over how his product was displayed in major retailers! Clients start out with the good card, get the gold card when they turn in the completed good card, etc. You can use the same concept (which is a huge success) to your advantage!

Get co-op help from one of your suppliers. Many vendors offer co-op advertising assistance (marketing dollars). Some want you to include their company logo, some just want you to promote their products (or services) along with yours. Example: Nail polish vendor wants you to carry their (more expensive) line in your salon. Your "rewards" offer could be "after 5th haircut get your nails polished for free with super fabulous xyz brand polish". Vendor co-op could be negotiated as either the cost of the punch cards and/or getting a certain number of polish bottles (to the salon) for free. Just remember to keep the offer simple and easy to understand.

We strongly recommend that our clients test a marketing concept by only buying 1,000 cards and then LISTEN to the feedback of your clients as it relates to your marketing campaign. If necessary, tweak or change your offer (even if you throw away some cards) until you find what works for your business and in your area. Then, and only then, it is savy to buy a larger quantity (so that you never run out) once your concept is working...

You can go with less expensive templated type cards (and not look any different than others as templated cards are by nature a generic layout). Or you can use professional designers to create a custom look that is YOURS. Example: your punches are a miniature version of your logo. For the rather small difference in cost, we strongly recommend unique.

At Business Card Source, we can design to your specifications (you can tell us colors, professional fonts, etc) or you can let our design team come up with a concept for you -- as long as you tell us about your business. Items such as what is your average ticket sale helps determine what the punch values should be (if you are doing dollar values) to be effective. You decide what information, logos, or images go on your loyalty rewards punch card. Remember that gloss coating will prevent you from writing (or stamping) the surface of the card (unless you order a 4-1 card where the front is color and gloss coated and the back of the card is black text on white background without gloss coating). If you need to write on the front of the card, choose uncoated within the shopping cart (it's a pull down selection).

Go to the SOURCE -- Business Card Source -- for assistance that will help you INCREASE sales and INCREASE your bottom line profit margins!

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