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Offer Loyalty Cards in the Way That Lures Customers Back More Often

customernYou have probably been offered a loyalty card at some drugstore, car wash, coffee shop or other outlet you frequently use. When designed right, they can become one of your lowest-cost ways to lure customers back . Plus such cards can boost loyalty, bragging rights and profits.

Here’s how.

Now we’re talking about the kind of loyalty card that’s inexpensive to make so independent business owners can offer them. Not the laminated corporate cards. You can print elegantly designed paper cards that get stamped or hole-punched each time a customer buys from you. Of course you can also create loyalty cards that can be digitally swiped yet that approach costs more and is less likely to show the approach we are going to describe here.

Key Insight on Human Behavior: We are more likely to want to fill up our card to get something for free – if we believe we have already made progress towards our reward.

Quick Background on This Benefit: In a study, loyalty cards were handed out to three hundred customers of a car wash. Customers were informed that every time they bought a car wash, their loyalty card would be stamped. Cards were offered in two ways. One design motivated more customers to return and to return more often.

  • One type of card stated that eight stamps were required to receive a free car wash, and no stamps were attached to the card.
  • The other kind of card stated that ten stamps were required to receive the free wash, but two stamps were already affixed to the card.
  • Both cards required eight purchases to receive the award, but the second group seemed well on its way to completing the card with 20% of the stamps needed for the free wash.

Loyalty cardNote:  Most paper loyalty cards offer “just” the tenth one for free yet offering two out of ten for free sufficiently increases total sales to be more profitable for you. coffee

Conclusion: You will spur customers to return more often if you: give them a loyalty card with 10 stamps on it with two stamps already marked off rather than a loyalty card with eight stamps on it – yet with none of them already marked off.

If you are a small business owner who would like to compare the success of a paper loyalty card and a digital version, then it appears that your least expensive option is the iPad-based Huzzah Loyalty platform or FiveStars. See others here.

Categories: behavior, Customer, decisionmaking and tagged , , , .
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