How Customer Loyalty Cards Improve Business

Membership or customer loyalty cards are intended to create repeat business—always a goal for small businesses who rely on their loyal customers. But launching a successful customer membership program isn’t a quick fix. It takes careful planning to design and launch a loyalty program that can boost your business.

Still, the effort is usually worth the rewards. Learn the benefits of various types of customer loyalty programs and how to go about starting one for your customers.

Why Create a Customer Membership Program?

There are a number of valid reasons to start a customer membership or loyalty program, all with the goal of building a deeper relationship with your existing customers and increasing customer transactions.

First, a customer membership card or loyalty card helps your business engage with customers beyond the point of purchase. For example, consider a customer who comes into your bakery to purchase a birthday cake. Even if they have a positive experience, they may never think to return, especially if it’s easier to simply buy birthday cakes from their local supermarket. However, if the customer joins your membership program while paying for the cake, they now have a deeper connection to your business. You can now contact them to notify them of discounts and specials, and they may have added incentive to continue doing business with you because of the rewards associated with your loyalty program.

A customer membership program can help create customer loyalty because it encourages customers to come back again and again to earn rewards and take advantage of discounts and membership perks. If you ask for customer contact information when a customer registers for the program, you can use that information to develop a customer mailing list for ongoing promotions.

Finally, a customer loyalty program also helps you reduce marketing costs. That’s because it allows you to focus on marketing to customers who have a relationship with your business and already appreciate your products and services. This can often be more cost-effective than attempting to market to a wider, less targeted audience.

Types of Membership Card Programs

There’s no "one-size-fits-all" customer loyalty program. For best results, it’s important to take time to determine which type of program will best fit your customers and your business.

Here’s a look at four of the most common types:

1. Points Programs

With a points program, customers accumulate points based on their purchases. On a regular basis, customers receive coupons once they accumulate a certain number of points. For example, customers might earn one point for every dollar spent in your business and get a $5 coupon for every 100 points.

2. Cashback Loyalty Programs

Similar to a points program, a cashback program allows customers to earn a certain percentage back in coupons or "cash" with each purchase. They are able to use the "cash" or coupons for future purchases at your business.

3. Punch Card Programs

With a punch card program, customer members are given business card-size punch cards emblazoned with the company’s logo and information, as well as a certain number of spaces to "punch" with a hole puncher. Customers get their membership card punched (or marked by a staff member) for each purchase of a specific item, such as a cake, pizza or haircut.

After a certain number of punches, the customer gets the next purchase of that item free. Many traditional "punch card" programs are now monitored online without actual paper cards, but maintain the same basic principles.

4. Tiered Loyalty Programs

This type of loyalty program includes various levels of spending, and customers get different rewards based on the amount they spend with the business. It allows a business to offer rewards even for infrequent or low-spending customers while reserving more valuable rewards for the biggest spenders.

How to Launch a Customer Loyalty Card Program

If you’re ready to start a customer membership or loyalty program, start by choosing which behaviors you want to reward. For instance, do you want to reward customers for any purchases they make? Do you want to focus on rewarding bigger spenders? Or if you’re hoping to push certain products, you may want to award purchases only of specific items.

When you decided on the behaviors you want to reward, next determine how you will keep up with points. For instance, you may want to use actual cards, especially if your customer base is less comfortable with technology. But if your customers have smartphones or are fairly tech-savvy, you might opt for an online membership program.

Choosing an online membership program allows you to record customers’ points or purchases even if they don’t have their membership card with them when they make a purchase. It also allows members to check their points balances online and more easily engage with your business from wherever they are. A number of vendors are available to manage an online loyalty program, such as Antavo and Comarch.

After deciding how you’ll keep up with members’ points, develop a strategy for how you’ll get customers signed up for the program. You might consider signage in your place of business, social media announcements about the membership program, and emails to your existing customer list. You could also encourage staff members to ask each customer if they’d like to join the program upon completing a purchase.

Finally, once the membership program is in place, use it to keep customers coming back. In addition to providing rewards through the membership program, you might also consider offering other perks, such as private announcements and sales for members only.

Customers who join your loyalty program are taking a step to build a long-term relationship with your business. While they expect to earn benefits through the partnership, their loyalty will also reward your business again and again.