Why More Businesses are Starting Loyalty Card Schemes

ncreasing numbers of businesses are following the example of retail giants like Tesco and Sainsbury’s by launching loyalty card schemes. From high street banks to eBay sellers, it seems no company is too big or too small to reap the benefits. In this article, we’ll look at why loyalty schemes are becoming so popular and explain some of the ways other businesses are using them to their advantage.

Why set up a loyalty scheme?

All businesses benefit from retaining customers over the long term and increasing their lifetime value. The challenge, however, is to keep them coming back. One of the most effective ways to achieve this is through a loyalty scheme where customers are rewarded for their continued patronage.

A recent survey of the restaurant industry discovered that customers who had a loyalty card were twice as likely to buy something than those who weren’t. And with 80% of customers willing to sign up to a loyalty scheme, it shows how powerful they can be in generating repeat business. Today, the average person carries three loyalty cards and this is predicted to increase significantly as we come to the end of the decade.

How to get customers to sign up

One of the hurdles of launching a loyalty scheme is getting existing customers to sign up. The golden rule is to provide the right incentives. These can come in many tempting forms: freebies, discounts, redeemable points, exclusive invites and so forth. The more value a customer sees in your scheme, the more chance you have of getting them to join.

The other issue is making it easy for people to join. Getting customers to fill in long complicated forms at the checkout is not the most inspiring of ways. Today, it can be done simply by giving them a smart card which they can quickly activate online or getting them to register online and sending them the smart card through the post.

Why it is crucial to get online registration

Getting customers to register their loyalty cards online is essential for success in today’s technological world. When surveyed, three-quarters of loyalty scheme members said they would prefer a business to contact them via email. Online registration makes this simple and lets the customer update details if needed.

However, online doesn’t necessarily mean visiting the company website. 73% of customers also said they were likely to download a loyalty app if a company had one. These too can be used to register details.

Being able to use these forms of communication with your loyalty scheme members enables you to send them regular updates about events, new products and special offers in order to entice them back. What’s also beneficial is that loyalty customers are 40% more likely to open an email than other subscribers.

Personalisation works

Another effective way to get loyalty scheme members to return is to send them personalised information. 73% of customers would prefer offers and rewards which are linked to their previous visits or their purchase history. Finding this information can be difficult in a bricks and mortar business, however, when a customer scans their loyalty card every time they make a purchase, it is possible to collect their purchasing data.

This data enables you to understand which items each customer prefers, what they buy, and when they keep coming back. You may also find an item on their wish list which they’ve never got around to buying. Send them a great offer on that and you are providing outstanding service with your loyalty scheme.

What else do customers want from loyalty schemes?

In the restaurant survey, the most popular thing that customers wanted from a loyalty scheme were easy ways to earn rewards.

When it comes to earning rewards, it is important not to focus completely on rewarding purchases. Although the ultimate aim is to get the customer to keep spending, you can also reward them for other things which benefit your company, for example, you can offer points for leaving reviews, checking in on social-media, referring friends or attending an event.

Aside from the immediate benefits of getting loyalty customers to do these things, they also help establish a stronger relationship between the customer and the company, increasing the depth of brand loyalty.

Loyalty kudos

People love feeling special and a good loyalty scheme should help them feel part of an exclusive club. They reward you with repeat custom, you reward them with benefits other customers don’t receive.

You can enhance this effect by creating different loyalty levels (silver, gold and platinum, for example) where better loyalty performance leads to increasing levels of benefits for the customer. Higher level status could be given for those who have been customers for a certain length of time or who have shopped with the store on a certain number of occasions.

One way to give status to these customers is through the design of your loyalty card. High-quality PVC smart cards, such as those available from Universal Smart Cards, can be produced with your design and branding printed on them, enabling you to create loyalty cards that give your customers a sense of kudos when they use them.

Wrapping up

Loyalty schemes play an important role in encouraging repeat business and can significantly impact on a business’s sales over the long term. They are inexpensive to set up, provide detailed information for personalised marketing, they assist in attracting new customers and give your existing members a much-improved customer experience. It’s no wonder so many businesses have already made use of them.


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