Digital loyalty schemes are a great way to gain insights into your customers’ spending habits and build sales while rewarding them each time they return
Card and contactless payment methods are pushing out cash. Delivery and click and collect are taking over from walk-ins. As a result, it seems physical loyalty cards – whether stamped pieces of card or swipeable bits of plastic – could be overshadowed by digital versions in the form of an app and a QR code.
Barry Dickman, managing director of BD Signs, which offers a digital loyalty scheme within its Mi Order software, believes this is inevitable as customers become ever more reliant on digital devices. “Screen time for consumers is far greater now than anything else so digital loyalty schemes are the way to go,” he says.
Barry adds: “In-store, most people these days pay with their phones. To pay with a phone and collect or redeem loyalty points at the same time is a lot easier than pulling a loyalty card out your pocket and then money out of your wallet. With a digital loyalty card, one transaction does it all.”
One of the biggest drivers of digital loyalty cards is the customer data it gives operators access to, not just their contact details but their spending habits which means promotions can be targeted at specific menu items, days or customers.
Jason Bailey, sales manager at Epos provider PanaEpos, which offers the ability to collect points and offer discounts with its software, comments: “Traditionally customer data was difficult to obtain, understandably customers weren’t willing to fill out a form when they were picking up their food, so many operators didn’t offer a loyalty scheme, but the birth of online ordering changed that. There is now a big interest from operators in using data to improve service and, in particular, to increase sales and customer retention. The main online ordering and delivery platforms don’t offer this and instead they keep the data for their own gain, consequently operators are turning to their own apps like Preoday and TouchTakeaway which offer this benefit.”
With this data in your hands, you can tailor promotions to suit you. You might decide to push your high profit items, run a special on something you have excess stock of, or offer double points for one week only. Unlike an advertising campaign or a leaflet drop that costs money, on a digital notification it’s free and it’s done automatically there and then.
What makes a good loyalty scheme?
It can be difficult to decide what to give away as a reward. Do you offer free food, discounts or points? And can customers redeem on the spot or do they have to visit several times? BD Signs’ Barry Dickman believes the best loyalty scheme is one that offers instant discounts.
Barry explains: “With today’s financial situation, people are definitely more interested in redeeming straight away. So if a customer can collect points that have a monetary value (1p, 5p, 10p per point as chosen by the operator) and they can redeem that on their next order, you’ve got more chance of them coming to you than going to somebody else.
“Also, if you’ve got a stamp card where on your 10th stamp, you get a free bag of chips, you’ve got to visit 10 times. A customer might only come to you once every month, so that’s almost a year before they redeem it. Will they keep that card in their wallet for a month? Will they have that card every single time they come in? With a digital scheme, they have it with them all the time.”
Are they expensive?
Going back a few years, downloadable apps were only for the main operators because they carried a hefty price tag, but popularity and advances in how an app is developed has bought the price down considerably.
Jason Bailey of PanaEpos comments: “Without the eye watering initial outlay, operators start to see a return on their investment immediately, contributed mostly to use of the data for marketing, the ease for a customer to reorder based on their order history and upsell prompts which increase average spend per order.
“In addition to these benefits, operators who encourage their customers to use their app to gain loyalty points will also benefit from the advantage of foresight allowing them to plan stock and prep to decrease wastage, but also to rota the right amount of staff on for shifts.”
Operators also benefit from not having to buy physical cards which can be snapped and lost, plus they will find that customers use their loyalty scheme more often because of the ease of access. The customer benefits too, with the added ability of being able to see real time account balances.
What to consider?
Shops considering digital loyalty should first consider the data they can obtain. Essentials would be name and e-mail address, but the more data you can obtain the better. You might think you don’t need it but you probably will further down the line.
You should also think about how easy it is for a customer to sign up – the process can’t be drawn out and complicated or the customer will give up – and if it integrates with your till, as this creates an easier to use system with all data going to one back office where it can be managed.
And, finally, PanaEpos’s Jason says ask what other operators use it. “This is vital, there are so many ‘bedroom software programmers’ out there! Poorly developed apps can be clunking, undeveloped and maintained and consequently hugely time consuming. If no one else is using it, there has to be a reason why. The biggest investment when developing a loyalty scheme isn’t money, it’s your time and choosing the wrong app will waste a considerable amount of it.”
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