Customer loyalty is critical to the longevity of your business. Consider that the probability of selling to a loyal customer is 60% or more, while you have a 5%-20% chance of selling your product or service to a potential customer.
Building and sustaining a loyal customer base is an ongoing process. Unfortunately, it's impossible to convert all of your current and incoming customers into brand loyalists overnight. However, there are steps you can take today to start earning more without having to bring in new customers constantly.
One of those ways is to take the first steps to set up a customer loyalty program. You’ve likely seen (and owned) loyalty punch cards, but now there are digital options. Let’s review.
Pros and Cons of Card Based Customer Loyalty Programs
Most likely, paper punch cards are what comes to mind when you think of loyalty programs. They’re the classic option, but will this old-school tactic help your business in this modern, digital era? Here are some ideas to consider.
Pro: Cards are familiar and easy to take
If you’re familiar with paper punch cards, then your customers are too. They’ve likely owned some in the past and are familiar with how they work. Plus, it’s easy to pick up a card from the stack by your register and pop it into a wallet. This low barrier of entry means you’ll have more people pick up the card.
Con: Paper cards are easy to lose or forget
The popularity and familiarity of card-based loyalty programs mean your customers could be swimming in them. Keeping track of cards and remembering to use them each time they return to your business is tricky. In fact, 43% of customers say physical cards are the biggest obstacle to redeeming rewards.
Con: Punch cards limit reward variety
Printed loyalty cards are meant to be compact and streamlined. Therefore they can’t have multiple options when it comes to how rewards are earned or redeemed. Customers need to buy the same type of item over and over again and only have one choice of reward for their loyalty.
Pros and Cons of Digital Customer Loyalty Program
Technology has the power to make the life of a business owner simpler. The right apps and programs can save time, money, and headaches; and digital loyalty programs are no exception.
Pro: Digital loyalty programs provide a variety of rewards
Apps can hold a lot more information in an organized way than paper cards can. Therefore, you can promote a variety of ways to earn points. Additionally, customers have more options about what rewards they want to redeem.
Pro: Customers won’t lose an app
Walk down any street or step into any waiting area and you’ll see how important mobile phones are. While people may forget to keep your punch card around when they switch wallets or purses, there’s no way they’re leaving the house without their phone. 71% of customers say they’re more likely to use a card if it’s on their phone.
Pro: Digital apps are the “green” options
On top of the fact that customers always have their cell phone with them, digital loyalty programs are an earth-friendly option. Having an easy to access app eliminates the need for printing paper or plastic loyalty cards. Digital is good for your business and the planet.
Con: Your app could get lost among a sea of other apps
As a person adds more apps to their phone, yours might get lost in the mix. However, push notifications can keep your business top of mind.
How to decide between a card or digital customer loyalty
Every business decision you make has a pro and con, but how do you weigh the options to make the decision that’s best for you? Once you decide that a loyalty program is right for your business, here are a few factors to consider to choose between paper and app.
What’s your budget?
Online printing companies make it easy to find deals for printing punch cards. However, you’ll need to keep in mind that a lot will go to waste when they get lost or forgotten. On the other hand, a digital app that stays in your customer’s pocket at all times costs $125 a month.
What type of reward do you want to offer?
If a free sub after purchasing 5 is all you want to offer then a paper punch card is a good, simple choice. However, we’re willing to bet there's more you could provide to make your loyalty program more enticing.
Do you have an existing referral program?
On top of offering customer loyalty rewards, Sparkage delivers an organized referral system. If you already have an effective referral program in place, then a paper punch card is an easy way to start building loyalty.
Ready to start earning more business with a digital customer loyalty program? Request a demo to learn about our features, setup, and how a customer loyalty program could work for your small business.