Chapter 1: How Loyalty Schemes Boost Revenue
As the cost of living continues to rise, consumers are looking for a way to reduce their household costs. That includes things like groceries, clothing, and other necessities.
One method of saving money that people are buying into is customer loyalty schemes. Although the pandemic has increased loyalty between a consumer and their favourite brands, price increases are threatening to derail this trend once again. Customers are beginning to shop around to find the best price for what they need, and are likely to be swayed by rewards and discounts offered by a loyalty scheme.
What is a loyalty scheme?
Loyalty schemes are a way for businesses to show appreciation to their customers, and offer them an incentive to keep them coming back for more.
The type of loyalty scheme you provide is up to you, but we recommend using a points per pound programme. This loyalty programme offers your customers one point for every pound that they spend with you, and you can set rewards based on what your customers like.
This can be discounts – for example, 5% off if your customer has collected 500 points – or it can be free products. Offering products as rewards can benefit your business in different ways: first, you can give away branded goods that act as a word-of-mouth marketing tools. You can also use it to increase your stockholding capacity, by giving out slow moving stock as your rewards.
Customer loyalty reward schemes aren’t just about giving your customers discounts or free products. Instead, as customers sign up, you can use your scheme to collect important data that helps to improve your business.
With Reward-It’s loyalty card scheme, you can customise the information you want to collect with custom fields, so you can note on each individual’s records whether the purchase cat food or dog food, or what location they shop from – the choice is yours.
You can also record information relating to the usage of the loyalty card and the customer’s birthday, allowing you to use the built-in marketing platform to send automated emails. These emails can include:
- If a customer hasn’t scanned their loyalty card in a while
- If a customer has a high points value that you want them to redeem
- A birthday discount or treat that encourages customers to visit your shop
By setting these up as automated emails based on dynamic data collection, you can let them run with no input or time spend after the initial configuration.
Benefits of loyalty schemes
There are plenty of benefits that loyalty programmes can offer your business.
As the market continues to grow with online stores popping up constantly, you need to be able to offer your customers something that your competitors cannot, and this can’t be achieved by brand awareness alone.
Introducing a loyalty scheme is a way for you to stand out from your competitors without needing to lower your prices or market your business extensively. Instead, you can offer your customers an emotional connection with your business – providing them with an enhanced experience that they’re going to remember.
Consumers who are emotionally connected with a brand have a higher lifetime value of approximately 306% and offer word-of-mouth marketing. 71% of consumers will recommend a brand that they share an emotional relationship with.
Customer loyalty schemes also increase profits, with businesses reporting that a 5% increase on customer retention leads to a minimum of a 25% increase in their profits.
And loyalty schemes are often a key turning point for consumers when it comes to making deciding between two competing businesses, as 48% of consumers in UK have stated they have joined loyalty card schemes to seek extra value on their purchases – with participants of loyalty schemes saving an average of £257 per year.
Types of loyalty schemes
Reward-It’s loyalty schemes are customisable, allowing you to choose the type of loyalty scheme that suits your business and your requirements.
You can invest in printed PVC cards that your customers can keep on them. These can be in the form of standard credit card sized cards, or tags which attach to a keyring, and can be custom designed to suit your business’s branding. This helps to boost word-of-mouth marketing as your branding is present, but can cause complications when customers forget their cards.
Another option for Reward-It’s loyalty software is to have a digital loyalty scheme. This means you don’t need to purchase printed cards, as customers can sign up using the dedicated app, where they will have a unique digital loyalty card that can be scanned every time they visit your business.
The digital loyalty scheme can be used alongside printed plastic cards, with customers being able to link more than one card to their account. This is ideal, as the majority of customers will always have their phone on them, and digital loyalty schemes are preferred by 57% of shoppers.
Having a customer loyalty scheme can enhance the value proposition of your products or services, and encourages consumers to choose you over a competitor – and you can customise your scheme for your requirements.
Chapter 2: Rolling Out A Loyalty Scheme
Small businesses face a unique challenge when it comes to customer retention. They often do not have the same resources as larger businesses to invest in expensive marketing campaigns, and so building customer loyalty can be even more critical to their success. One way to build that loyalty is through a loyalty scheme.
If you’re looking to start a loyalty program, you have two options: a digital loyalty scheme or a physical loyalty scheme using printed loyalty cards. Digital loyalty programs have gained significant popularity over the past few years, but printed loyalty cards still have a place in the market, especially for small businesses.
Choosing your loyalty scheme
Here at Reward-It, we offer both physical and digital loyalty schemes. If you choose to go with a physical loyalty scheme, you have the option to order printed loyalty cards through our in-house printing service. You have the flexibility to create custom designs, branded with your business’ style and colour scheme.
Physical loyalty cards can serve as a tangible reminder for customers to return to a business and make a purchase. This can be especially effective if your small business relies on foot traffic or local customers who may not be as tech-savvy.
Additionally, physical loyalty cards can help to build brand awareness and loyalty as customers carry the card around and see the business logo or branding. Physical loyalty programs may be more accessible to all customers, regardless of their access to technology or digital devices.
We also offer the option of a digital loyalty program. Digital loyalty schemes are more convenient for customers as they don’t have to carry a physical loyalty card, which can be easily lost or forgotten. With a digital loyalty program, customers can easily access their rewards and track their progress through the easy-to-use loyalty app.
Digital loyalty schemes offer better data tracking and analysis capabilities, which can help small businesses understand customer behaviour and preferences. This, in turn, can help businesses make more informed marketing decisions and improve their overall customer experience. Additionally, digital loyalty schemes are more cost-effective and environmentally friendly compared to physical loyalty schemes, as they don’t require the production and distribution of physical loyalty cards.
If you would like to implement both a digital and physical loyalty program into your business, our cloud-based loyalty software is compatible with both. The flexible system allows for both digital and physical loyalty cards to be distributed to your customers, so you won’t need two separate systems.
Which loyalty scheme you choose depends on your individual requirements. Businesses should consider which option is best suited to their particular needs and customer base before making an informed decision.
If you require more information about which loyalty scheme is better suited to you, please contact a member of our expert team who will be happy to advise you.
Setting up and marketing your loyalty program
Once you have chosen your loyalty scheme, it is time to set up your unique rewards program tailored to your business. Using our cloud-based loyalty software, you have full flexibility to set up a points and reward system to suit your business’s individual requirements. You have full control over how many points your customers get, as well as what rewards they can redeem. As well as this, within the software, you can build a customer database, which is useful for marketing.
To reap the benefits of your loyalty scheme, you can use the software to utilise useful information like customer statistics to find out consumer trends and popular products. This enables you to segregate your customers into groups and send out emails tailored to them about their most redeemed rewards, as well as newsletter-style emails to increase brand exposure.
Marketing your loyalty scheme is crucial for your small business to ensure that customers are aware of the rewards and benefits they can receive by participating. One effective way to promote your loyalty scheme is to leverage your existing customer base by sending out email newsletters, text messages, or social media posts to announce the launch of the new program and promote any special offers or rewards for signing up. You can also include information about your loyalty program on your website, if you have one, and on in-store signage.
Another effective strategy is to incentivize customers to refer friends and family to the loyalty program by offering additional rewards or discounts for each new referral. Word-of-mouth marketing is one of the most effective, and asking your customers to refer a friend brings opportunity for even more loyal customers.
By using a combination of these strategies, you can effectively market your business’s loyalty scheme and encourage customers to participate, ultimately leading to increased sales, customer retention, and business growth.
Chapter 3: Types of Cards: Digital, Physical and Key Tags
Once you have your loyalty scheme in place, your customers need to be able to use it. This is enabled by issuing loyalty cards, featuring a unique QR code, that can be scanned at the transaction point to allow your customers to collect points.
Loyalty cards can be flexible depending on your requirements. That includes the use of printed cards (standard CR80), combi cards (which include a CR80 card and a key fob), or individual key fobs. You can also choose to make your scheme entirely digital and allow your customers to collect points using a QR code on their phone.
The option you decide on, depends on what you would like to get out of your loyalty scheme.
Custom printed cards
With custom printed loyalty cards, you can create your very own design that represents your business.
You can add important branding, such as your logo, custom text, and any other assets that suit your business. We recommend using your standard branding, such as colour scheme and fonts, to ensure continuity with your business. This helps customers to easily identify their loyalty card, and it enforces brand awareness.
There are several different print processes for your printed loyalty cards that can help them to stand out, including:
• Hot foil
• Spot UV
• Embossing
• Magstripe
All these features can be used in conjunction with two finish types, matt and gloss.
For a more traditional approach, you can print your designs on to standard credit card sized cards (CR80). This allows you to print on both the front and reverse with your own design and include more information.
Alternatively, you can hand out key tags to your customers. These are small plastic tags that are designed to attach to a keyring or lanyard. Customers are less likely to forget their card when attached to important keys. Although this printing space is smaller, you can still create a personalised design on the front and include the unique QR code on the reverse.
We also offer combi cards, which allows you to issue your customers with both a standard credit card sized card (CR80) as well as a key fob. The cards are attached when issued, but can be easily snapped apart, so your customers can keep one in their purse or wallet, and one on their keys or lanyard.
Digital loyalty cards
If you’re looking to improve your sustainability credentials, or make your loyalty programme entirely futureproofed, you can offer your customers digital loyalty cards via a smartphone app.
These loyalty cards offer a unique QR code in the same way that a printed loyalty card does and is linked to the user’s account. You can also use the digital app to show your customers their points balance and any rewards that are available.
You can also use printed and digital loyalty cards together, as customers are able to link more than one QR code to their account. Most people carry their smartphone at all times, so this means that they can still collect points, even if they forget their loyalty card or tag.
