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21 December 2020

10 reasons why your business needs a loyalty card

Loyalty cards benefit both the customer and the business, whatever its size. From large businesses having focused on them for decades such as Tesco’s Club Card and Boots’ Advantage Card, to smaller independent shops creating their own low fi versions; they are a tried and tested mechanism that work. Here at BPAK, we create packaging for loyalty cards, with the brand and the customer’s experience in mind; we understand how well they work.

Here are 10 reasons why your business should introduce a loyalty card:

 

For a straight forward, trusted process

Loyalty cards are well known and trusted; Tesco introduced the Club Card back in 1995 and within a year, customers were spending 28% more in its stores and 16% less with its closest rival Sainsbury’s, which by then had introduced its own Reward card (source – BBC News). They weren’t the first though – Greenshield Stamps, introduced in 1958, encouraged people to shop at certain retailers to collect stamps to swap for rewards. This shows that the general public like and trust loyalty cards – if they were going to shop with you anyway, getting a reward occasionally is a no brainer.

 

Gives your business a competitive edge

Your business loyalty card may well be the reason why people shop with you, and if your competitor doesn’t have one – all the better. If you had the choice to buy an item from two shops that you use regularly, and one offers you a voucher or a freebie as a reward for your loyalty, then you would choose them. It also shows your customers that you care about them.

Encourages the frequency of sales

By introducing a “buy 11 and get the 12th free” promotion with your loyalty card, you encourage customers to stay with you as well as to buy more often from you. This customer retention is vital to grow your business; it is thought that if you increase customer retention by 5%, you can grow your revenue up to 95%. Plus it is easier (and cheaper) to sell to the same people than to find new people.

 

Encourages customers to try new things

By offering a freebie after a certain amount of purchases, your customers will be more prepared to try new things as of course, it is free. This way, you will be introducing new products to them which in turn may well lead to more sales.

 

Can grow organically, without too much marketing

As business loyalty cards are standard practice now, it won’t need too much marketing to get buy-in from your customers (remember they are already customers!). They are more likely to tell their friends and family about it as and when they get rewarded, which of course is free advertising.

A way to understand your customer’s shopping habits

If set up properly, you can better understand your customer’s shopping habits, helping you to target them better in the future. You will learn what they like to buy when they buy it, how much they like to spend and potentially who for i.e. do they have a baby? You can then target them with offers and promotions in the future to again increase sales.

A great way for your customer to feel valued

We all want our customers to feel valued and what better way than rewarding them for shopping with you. This feeling of being appreciated will in turn, again, lead to better retention of customers and overall increased spending.

Encourages people to spend more

While you of course want to retain your customers and for them to shop more often, you also want their basket spend to increase. A loyalty card will do this (again with little advertising) increasing revenue.

You can target customers with incentives

By understanding your customer’s spending habits, you can then send vouchers, 2 for 1 offer and the like to encourage more sales. They feel that they are being rewarded, while you are driving sales. The best way here is to personalise them to their likes and demographics i.e. baby-related product to that customer who has a baby.

A self-sufficient mechanism

Finally, the process is easy for you to manage. Once you have the business loyalty card and its packaging in place, it is the customer’s responsibility to remember to bring it in to get stamped or swiped. The onus is on them to use it, but of course, your team or website can encourage it at the checkout stage.

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