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“Loyalty Cards Don’t Drive Loyalty,” so what does?

This post is in response to “Loyalty Cards Don’t Drive Loyalty” by Colin Shaw.

How many loyalty cards do you have in your wallet right now? I just counted the cards on my keyring. I have thirteen. Thirteen! That seems like a preposterous number. I certainly don’t use every card on a regular basis, so what distinguishes the cards that I use from those that sit abandoned on my keyring?

According to Colin Shaw in his post, a loyalty card does not guarantee a customer’s loyalty. A study by The Logic Group reveals that, while 62% of people surveyed belong to a loyalty program, only 23% think it makes them more loyal to a brand. The difference, according to Shaw, is the discrepancy in how customers and brands view a loyalty program. Customers view loyalty cards as an extension of a brand’s offering, not an extra incentive.

As a brand, a “loyalty card” is a program that will create customers that are loyal to your brand – that is, they return again and again over your competitor(s) because they are part of the program. Shaw says this about loyalty cards:

“Loyalty cards are perceived by companies to build loyalty from the customers that use it by providing additional benefits to the possessor while reward cards are meant to incentivize behaviors.”

So what’s the difference? A loyalty card does NOT secure loyalty from a customer to your brand. It does, however, provide a gateway for you to engage with your customers on a consistent basis. Adding a loyalty program is not an automatic fix that will suddenly draw flocks of customers that will stay with your brand forever. It does give new and returning customers a reason to use your service, and provide a window for you to get back in touch with them.

How do customers want to be engaged and rewarded? According to a 2012 study by ICM, 75% of consumers would prefer to receive smaller rewards on an ongoing basis than a chance to win one large prize. Rewarding and engaging customers early in their experience with your program will keep them coming back. Consider offering lower level prizes, like digital rewards, that are quickly attainable and instantly available.

Build and nurture long-term relationships with your customers by offering a loyalty program, but don’t view it as a quick, band-aid fix. Your loyalty program can provide valuable insights into your customers’ needs and will help your serve them better in the future, creating a strong relationship that will keep them coming back for more.

To learn about how we can help you with your loyalty program, contact us!

Read Shaw’s full article here.