Loyalty programs are really popular lately. It seems like everywhere I go, I’m asked if I have a “Rewards Card.” Some stores have complex systems that reward me with various prizes after I’ve earned enough “points.” Others are very simple and just give me a free meal food item after I collect enough stamps on a paper card. For the most part, I like loyalty programs.
Do I patronize certain businesses in order to earn free stuff? Yup. Maybe it’s because I’m cheap. Maybe it’s because I really love getting something for nothing. I only schlep around loyalty cards for the businesses whose products I really love, though. I don’t tend to seek out and use coupons much. But it’s not too much work to pull out my loyalty card and get it stamped. And if I’m buying a latte almost every morning anyway, shouldn’t I get a free one every couple weeks? I’ll choose the little local coffee shop for my latte over the national chain whenever I get the chance. Partly because I believe in shopping local, and partly because I love that free coffee.
I went to lunch with a group of my girlfriends last week. We were trying to decide where to go to eat. “Let’s go to Cafe Rio,” I said, “I have a free meal there.” So all four of us headed off to the yummy Mexican place for a salad. My meal might have been free, but I’d brought the other three women in to drop their cash at the restaurant. Talk about word of mouth!
Fancy, Expensive Programs
I’ve heard that loyalty programs can be expensive and complicated to set up. I’m not sure why. Some stores make it way harder than it needs to be, in the interest of collecting data. For instance, Subway has plastic loyalty cards that get swiped like a credit card. To get one, I provided the restaurant with my name, address, email and other details. Subway’s fancy computer system keeps track of how many points I have and also tracks what I buy and how often. I can see how a loyalty program like that is expensive. It’s also unnecessary in my opinion.
For one thing, it’s hard for me to see how much longer I have until I get my free goodies. The card has no indicator on it. I think I can log into a special Subway website to keep track, but honestly I’m just not that into it. It’s much less motivating to go to Subway as a result.
For the restaurant, I suppose having my data is helpful. But Subway is a big national chain with a big marketing budget and the money to hire people to track my shopping habits. For a smaller company it probably just doesn’t matter that much.
Keep it Simple
As a consumer, I prefer the simplest loyalty programs. Both Cafe Rio and my little coffee shop have cards that are similar to a business card. Cafe Rio’s card has ten lines on it; each line gets a stamp for every meal I purchase. The coffee shop has a cute little paper punch in the shape of a coffee cup. After I buy ten times, I get a freebie. Easy for me, easy for the business.
You Still Have to Shine
A loyalty program is just what it sounds like—a program to create loyal customers and reward them for coming back. It isn’t an effective marketing program all by itself. And you have to shine in order for it to work. Your product has to be high enough quality that people want to buy it again and again. Your service has to be consistently good so that people are willing to deal with you on a regular basis. Most people aren’t willing to put up with a huge hassle just to get a free cup of coffee every few weeks.
Does your business use a rewards program? How’s it working for you?