We’ve all seen them — the simple wallet-size cards that get stamped or punched every time you make a purchase at the coffee shop. And, since an Accenture study found that over 90 percent of companies use some type of loyalty program, you may feel you need a loyalty program just to stay competitive.
Would punch cards be a good fit for your business? Here are a few points to ponder if you’re considering utilizing punch cards as a small business loyalty program.
Three Punch Card Pros:
1. They’re Simple to Launch
To launch a punch card program you’ll need small, wallet-sized cards for your customers. When a customer makes a qualifying purchase and presents their card, your employee will “punch” (or stamp) the card. The customer earns a free item or a discount when the row of punch spots is filled.
To begin, decide what will earn a punch. Next, decide how many purchases or services are required to earn the discount or free item. This is easiest for businesses with limited item selections, such as coffee shops or pet food stores. For example, a coffee shop could offer a free small coffee for every five punches on a card, representing five previously purchased coffees.
2. They’re Cheap to Produce
Producing punch cards is inexpensive. Just print out a bunch of cards on either plain white paper or card stock. They should include your logo and business name, plus a grid of “punch” spots. So, your costs are just the time involved to design the card, the paper, the printer ink, and either a one-hole punch or stamp for your staff to use.
3. Punch Card Loyalty Programs Are Easy to Learn
Unlike more complicated digital rewards programs, punch card loyalty programs are easy to teach to your staff. They need to know which purchases earn a punch, how many punches a card should include to get the free item or discount, and what the item or discount actually is. That’s it.
Three Punch Card Cons:
1. It’s Very Easy to Create Counterfeit Punch Cards
All of this simplicity comes with a price. Just as it’s easy to launch, produce, and train staff on working with a punch card loyalty system, it’s also easy for bad guys to create counterfeit punch cards. So, you could end up giving away free products.
2. Cheating Is Easy, Too
Some customers will cheat. Though someone may have been given a loyalty punch card when they visited your store and made a legitimate purchase, it’s easy for unscrupulous individuals to punch an extra hole or two in their card so they’ll get their free item sooner rather than later.
3. Punch Cards Don’t Give You Any Usable Data
Part of the appeal of technology-based loyalty programs includes their ability to collect useful data. Tracking the age, sex, location, and buying habits of customers can help you fine-tune your marketing or product design. You could even introduce new services or products based on the data collected. You gain loyal customers plus access to valuable data. But not with punch cards — all you get is a repeat customer.
Learn How to Keep Your Customers Coming Back for More
Maybe punch cards aren’t the right long-term loyalty strategy for your small business. The good news? There are many other options.
If you’re determined to increase your sales by building loyalty with your existing customers, get your free, downloadable eBook, How to Keep Customers Coming Back for More – Customer Retention Strategies, now. You’ll find actionable, easy-to-follow advice and useful tips on topics such as:
- How to use the Reciprocity Principle to boost your sales
- How to determine the value of various customer types to help you identity where to invest your loyalty marketing budget
- How to generate “social proof” that drives customer interest through the roof
To continue to grow your business, you want to engage your repeat customers. Get started building customer loyalty right away with immediate free access to your How to Keep Customers Coming Back for More – Customer Retention Strategies eBook.
Next Steps: Are you looking to keep up with the latest research and trends in talent management? We’ve got you covered with the weekly Small Biz Ahead Newsletter. Sign up today and start receiving the weekly newsletter chock full of the latest tools and resources to help you run a successful business.