Using Loyalty Cards to Grow your Sales

loyalty cardI see loyalty cards as big opportunities to grow sales in your stores. A lot of businesses have loyalty cards in their business but how well are they used and what’s the benefits to the customer?

First of all the reasons why businesses have them – they are designed to get customers to come back more frequently and the usual reward for customers is a free coffee after they purchase 6 or so. Some are more sophisticated and customers collect points which they can use next time they purchase or provide a percentage discount that accumulates.

I really like loyalty cards as they do drive some customer behaviour to return. Also my clients who run loyalty cards usually enjoy the benefits of these customers spending more when they shop. Now one reason is that these are your more loyal customers so they will spend more, but the increase in average spend is often considerably higher – some in excess of $6.00 – $10.00 per transaction.

So how do we maximize this opportunity. There are two very simple steps that staff need to follow:

Step 1 – staff have to ask every customer if they have their loyalty card with them. Too many times I go into a business and they don’t ask me for my card – I think what’s the point of having one if you don’t ask me for it. It’s like they don’t want customers to have one – or it might be reserved for their favorite customers If your business has a loyalty card, you and your staff need to ask for it every time.

Also it’s important to vary the way you ask for the card so you don’t sound like a robot – here are 3 different ways you can use:

  • “Do you have your loyalty card with you?” Assumes you should have one
  • “Got your loyalty card on you?”
  • “Are you collecting loyalty points?”

Step 2 – Once your staff have asked for the card (Step 1) if the customer doesn’t hand it over they need to follow up. I usually hear these words now being used “Would you like one?” Now what normally happens is most customers say “no thanks” and that’s the end of it.

So this question is pretty much a waste of time as it’s easier for the customer to say no. So how do you get around this – pretty simply by providing 2 – 3 quick benefits such as:

  • It’s our free loyalty card
  • After 6 coffees you get a free one
  • It’s really quick to sign you up
  • If you sign up online you’ll get a $5 bonus
  • There’s a great weekly prize

I have a number of examples of the differences in the two methods – “Do you want one” to providing benefits. One store went from 2 sign ups a day to 18, another from 5 a week to 40, so this works.

You could also be proactive and say to the customer “I’ll just stamp one for you now” and hand it over. I also spoke to one franchisee who went the extra mile with new customers by putting two stamps on their card at their first visit – now what does the customer think? Probably “wow, I’ll come back here again”. This is exactly what you want your customers to do.

Roger SimpsonRoger Simpson – CEO, The Retail Solution and Author of “The Retail Solution” With over 35 years’ industry experience, Roger Simpson is recognized as Australia’s #1 Authority on customer ROI in the retail industry and as a global expert on staff coaching, customer service and selling skills.