Procurement 14 March 2016

Make 2016 the year your micro business ditches customer loyalty cards

Micro firms should make use of smart technology and do away with loyalty cards

Loyalty programmes are great – they give a business the chance to encourage customers to engage with a brand beyond a single transaction. But, are loyalty cards holding your micro business back from unlocking its loyalty programme’s true potential? CEO of responsible small business finance provider Liberis, Rob Straathof, investigated on behalf of Business Advice.

Let’s face it, your loyalty card is not only a burden on the environment, it’s a nuisance for your customers too. As a micro business owner, your loyalty programme needs to be cost-effective and engaging whilst using as few resources as possible.

Here are five reasons to ditch your customer loyalty card and watch your loyalty programme thrive in the year ahead:

Customers don’t want to carry your card around with them

Are you keeping up with what your customers want from your loyalty programme? Forget perceived value for a moment here, let’s think about your own purse or wallet. I don’t know about you, but mine is fit to burst with all the credit card-sized pieces of plastic I’ve got from supermarkets, retailers, the gym – even coffee shops.

I actually feel the need to buy a bigger wallet to accommodate all of them lest I forget to bring the right ones out with me. Ask yourself, how many loyalty cards are you carrying around with you and do you actually want even half of them?

Digital loyalty programmes get used more

If your customers don’t want a card, what are your other options?Unlike a wad of plastic and paper cards, almost everyone has a smartphone on them when they’re out and about. Migrating your loyalty programme purely to mobile devices ensures customers have access to it at all times.

The time and effort of running a loyalty programme can take its toll on micro businesses, but a growing number of providers such as Belly, Perka and Huzzah have popped up specifically to serve businesses with ten employees or less. Having information about your loyalty programme on hand, on demand makes it easier for your customers to remind themselves of the benefits of using your programme, and for you to remind them.

However, simply scrapping your loyalty card in favour of digital isn’t enough to make customers sign up – your digital loyalty programme is only going to get more usage if you utilise real-time data and personalisation.

Profit from real-time offers

Not only can you do away with sending out-of-date paper point statements, updating points in real time and gathering purchase data gives you the opportunity to tailor hyper-relevant and timely offers that customers are more likely to take advantage of.

One way to do this is to remind customers when they have points or offers expiring – combining a sense of urgency with a genuinely good deal will result in an uplift of sales, and if it doesn’t you need to readdress whether your customers’ profiles actually make them likely to respond to your content.

To really step up your real-time offers, incorporate geo-locations – whether a customer is in a nearby store or browsing your shopping aisles, they’re in the mind-set of spending money so use what you know about them to encourage a purchase.

Personalised content drives more sales

Besides the usual account information and points balances, use data gathered from your loyalty programme to deliver unique content and user-specific offers.

Unlike a plastic card, you can use an app to tell your customers a story, share relevant information with them and become more to them than just a brand trying to sell them products; use your digital channels to become a useful and indispensable part of your customers’ lives.

By tracking your loyalty programme conversions, you can identify your most effective promotions and triggers for purchases on an individual level. Use any emerging trends in these transactions to scale up your marketing efforts; was your latest blog particularly well read in the days preceding an uplift in sales? Create an advertising campaign around it.

Save on manufacturing and environmental costs

Brands that ditch loyalty cards not only save on manufacturing costs, but they’re taking positive steps towards reducing the amount of unrecyclable waste created by many types of plastic used in these cards too.

Of course you could look into more sustainable alternatives, but when you consider that millions upon millions of loyalty, bank, gift, membership and utility top up cards are manufactured each year, it soon becomes clear that a digital approach to your loyalty programme is by far the least impactful on the environment.

Plus, you can grab yourself a bit of PR by finding a creative way of repurposing or recycling your customer’s old loyalty cards and win the favour of the rapidly growing number of environmentally-aware consumers.

Rob Straathof is CEO at Liberis

Is your micro business ready for the Internet of Things? Read our expert’s 15 considerations for owners.

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