TipsWe collected some useful tips about the loyalty system design.
The question arises in almost in every company manager: Why would I need a loyalty program? The answer is simple, you need only to consider the following questions:
Do you want to increase the sales in your business?
Do you want to keep your existing customers?
Do you want new customers?
Do you want to increase the customer’s satisfaction?
If the answer is “Yes” for any of these questions, then you should develop your own loyalty program, since its goal is to increase the sales, the customer retention, the acquisition of new customers, and the branding.
The Design of the System
The most popular loyalty programs are the Reward Programs, such as Shell and Super Smart Shop. The reason is that your customers receive points when buying goods and these points can be used later for buying products or services. You should develop a discount system on the basis of business management and unique ideas, we’re just using our experience for suggestions and we provide the most advanced technological solutions of our age.
Applying for Cards
In general the companies give customers the loyalty cards free of charge, but there may be a business model in which the customers can get a discount card by paying a fee. Such a solution is when the purchase of the card is joined with the first shopping (e.g. more than 50 EUR or USD), or may be someone can get a Club Card only by money. The latter usually means a more serious (up to 20-30%) discount card scheme.
Value of Points
The ratio of the reward points and the shopping value must be calculated carefully because you cannot change it on the fly, otherwise the consumer’s confidence will decline towards the business. The most commonly used type of discount is 0.2 EUR or USD = 1 point, as well as some percentage of the amount purchased (usually 1-5%).
The collected points are spent as cash in most cases or gifts specified in points can be received (products and services). The stores usually set out the worth of product / service in promotional points, or € 0.2 point = 1 USD system is applied.
Redeemable Products and Services
It should be taken with care to choose such good products or services which are not too expensive for the company, but customers can feel that they earned a value. These must not be very hard to reach for customers, because they will not feel enough motivation to obtain them.
Let us give reward points even for those actions, which are not related to the purchase (e.g. registration, customer’s birthday, company birthday and other events), as all this will also increase the satisfaction of our customers and they will return sooner to our stores.
Inefficient Card Systems
Often we encounter cards, who are called club cards, but behind them there is no any discount or system. There are companies who just produce club card for fun (because others have it too etc.), and they do not have a will to think about their own loyalty and reward systems. It’s better to spend the money for something else. A well-functioning loyalty program requires constant care.
Simplicity and Transparency
A well-designed, simple and transparent discount system should be established, because if the action is too complicated, the customers will be reluctant to deal with it.
The designed program should be supplied to the consumers using a proper communication channel. A common solution is when the company sends the regular customer a well-written direct mail accompanied with a card filled with some encouraging reward points in. In this case we usually ask our customers to activate the card in one of our stores. With this you can be sure that some money is going to be spent as well.
In almost every store you can buy some gifs and shopping vouchers in some form. In the ePontOK system you only have to initiate a blank card which can be called a gift card, and then we add some amount of spendable points to the card and it can be sent to the customer. Where applicable, the owned regular customer card can be a gift card, in this case the “Gift Points” feature allows you to record the required number of points.
You may offer an option to the clients to buy additional cards, with these kinds of cards you can increase the balance of existing regular customers exponentially.
The Web2Points system can easily organize a prize action, which is an appropriate tool for the promotion of the company’s products and services.
According to our calculations, to cover the fee for maintenance of the system it is more than enough to calculate with 10% of your regular customers if they spend around 5-10 EUR or USD once a month in the shop. But in reality, a much larger part of them will return at regular intervals, if we build an incentive system.