The Pros & Cons of Loyalty Programs
If you’re a business owner, you’ve likely struggled with the question: “How do I make my customers returning customers?” To answer this question, many of you have turned to loyalty programs, whether it’s creating ideas on your own or purchasing a service to keep your customers coming back. We decided to ask a couple of our Local First Arizona members what programs they’ve used and how successful they have been. Hopefully this will give you some insight on what program may be best for your business!
First, we turn to Urban Beans, a coffee shop in Phoenix. They have experimented with a couple of concepts, initially using the commonly seen “punch” or “stamp” card:
“We started with a paper card we created, 10 stamps and the card can be turned in for a free beverage of your choice. This was hugely successful, and we gave out about 300 or more a month. It cost us printing, $38 for 1,000 so roughly $15 per month… We have never had much luck with coupons, but the paper stamp card seemed to get a lot of return as people feel they ‘earned’ their free drink. I take that as a measure of the loyalty of customers, some even said they never turned them in, just collected them and kept them at their desk, sometimes using them as a gift card to others.”
This is a common strategy that many businesses turn to, usually because it is low-cost and mostly effective in providing some “value” to customers. Recently, though, Urban Beans was introduced to a new concept incorporating iPads and mobile devices:
“We were then introduced to Belly Cards, we liked what we saw and signed up, and have been phasing out our paper cards to be replaced with the Belly Cards… When we started using Belly, we had instant feedback from customers, they really like the technology, the fact that they interact themselves with the iPad, and that the card can now be used at over 75 locations in AZ (we were the second company in AZ to have the Belly Card). We like that the rewards can be designed by us, and help to show the personality of Urban Beans. Some of our rewards are quirky, like for 200 points you can name a new scone that we will bake, or for 200 points, you can be a Beer Barista for an evening…
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