Retail marketing efforts have spawned a plethora of customer loyalty programs. Companies exploit the fact that customers are creatures of habit. A consumer will become very attached to their favorite brand, a favorite restaurant, or commercial sales outlets. Businesses invest many resources into earning customer loyalty. The most widely used method to engender customer loyalty is the customer rewards card.
Businesses use many different names for customer reward cards but they are all basically similar. They are called point cards, reward cards, loyalty cards, advantage cards as well as many other names. When a customer makes a purchase they can complete a simple application form to join the program. At that point, a card is issued. This card looks somewhat like a credit card. It has a magnetic strip and the card can be swiped like a credit card. Sometimes a small key card is issued at the same time. A key card is a smaller version of the customer reward card and it can conveniently be attached to a key ring. The main purpose of reward cards is to track customer’s purchases in order to collect data about customers’ purchasing habits. The customer is given the incentive of discounts and special promotions to join the card club.
The technology that makes reward cards possible is the computerized point of sale systems that have replaced the old fashioned cash register. Point of sale systems are in reality sophisticated computerized networks that are integrated with inventory restocking systems, sales promotion systems, and customer purchasing databases. Point of sales systems provide instantaneous information to decision makers regarding sales trends. Detailed information about a customer’s purchases is entered into the corporate data bases every time a reward card is swiped.
Card holders receive special promotions and discounts. They become eligible for contests and rewards. They will receive emails that have printable coupons for further discounts and savings. Sales receipts will contain an URL to a website where an online survey is conducted. The online survey will ask customers to give feedback and comment on the quality of the service they received. A raffle like contest is conducted along with the online survey that gives the customer a chance to win cash prizes.
It is difficult to find a major merchandisers who do not have reward card programs. Customers love them because of the savings they receive. Businesses love them because of the customer loyalty they create and the useful consumer trend data they provide. Even smaller local operations are using reward programs.
Owners of commercial sales outlets have an ulterior motive in issuing these cards besides increasing sales. Because the cards communicate with the store’s point of sale computer systems, their databases can track each individual’s purchases. This enables the commercial sales operation to target ads specifically to the purchasing habits of individual card holders. Inventory can be more efficiently managed. This benefits both the commercial sales outlet and the customer since the customer is getting the products they want and the business is increasing sales.
There have been ethical questions raised about the predominance of the loyalty cards. Privacy issues are frequently discussed concerning these marketing techniques. However, the customer is not coerced into joining the loyalty club. In addition, customers clearly benefit from receiving discounts, lower prices and being notified when products they are interested in are available.
There is no question that a customer loyalty Reward program is a permanent part of retail marketing. Not only are they found in the traditional brick and mortar commercial sales outlet stores but they are widely employed in e-commerce internet sales as well. It is expected that these marketing techniques will only grow more sophisticated in the future.
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