Think of your favorite store. After you’d done business with them a few times, did they offer some sort of discount or reward? Most businesses do something like this for their repeat customers, and rewards are typically offered through customer loyalty programs.
Brands create these loyalty programs to show customers that they’re thankful for their repeat business and to encourage repeat visits as a means to receive free items. Many loyalty programs use a tiered-based system, where customers are offered various rewards based on how much they spend.
Although they’re not as common, punch cards are a type of loyalty program that businesses can use. While it may not seem like it, these simple cards can go a long way in terms of creating and retaining loyal customers. In this post, we’ll explain what punch cards are, give examples, and discuss how and why they increase loyalty to your brand.
What are customer loyalty punch cards?
Customer loyalty punch cards are business cards that can be stamped after every purchase and exchanged for rewards. Traditional punch cards are physical, but many businesses opt to create virtual punch cards on mobile applications.
For both types of cards, customers typically receive rewards after a certain number of purchases. With physical cards, a hole is punched through an icon. Once all icons are stamped, the customer gets their reward. With digital cards, customers typically scan a personal code, and an algorithm tallies purchases until they reach the reward threshold. After punch cards are filled out, customers usually get a new one and start the process again.
Rewards are business-specific, and you can customize your cards to meet your needs. For example, if you’re a sandwich shop, you may offer customers a business card with ten sandwich icons. After all ten sandwiches are stamped, a customer gets five dollars off their next sandwich. However, it is important to note that the rewards you offer should be valuable to your customers and relate to the products and services you already sell.
For additional context, let’s go over some real-life examples of punch cards from businesses you may be familiar with.
Customer Punch Card Examples
Although they may not call them punch cards, many businesses use this model to create their loyalty programs.
Starbucks, a coffee company, has a loyalty punch card program in their mobile application. When you visit the store and pay within the app or with your Starbucks card, you receive points. After reaching a certain amount, customers redeem them to make drink customizations or for free coffee and food items.
Goodwill is a nonprofit organization with thrift stores that sell second-hand items at low prices. Some stores offer physical punch cards, as shown in the image below, that can be stamped. Once fully stamped, a customer can redeem their card for a discount on their next purchase.
Flour is a bakery and cafe that offers a virtual punch card program. At every visit, customers can scan a personal QR code that makes a digital stamp on their loyalty card. After a certain number of purchases, customers receive rewards.
Below, we’ll explain how and why using punch cards can increase loyalty to your brand.
Why do punch cards increase customer loyalty to your brand?
As a refresher, customer loyalty is a customer's willingness to return to your business and make repeat purchases, usually because you provide them with exceptional experiences.
Given this definition, the straightforward answer to how punch cards increase loyalty is that customers are willing to make repeat purchases because you provide them with the exceptional experience of receiving rewards. There are additional reasons, though, that punch cards inspire loyalty, and we’ll discuss them below.
You’re keeping them engaged.
Customers that forget about your business aren’t going to be loyal because, well, they forget. A critical factor of customer loyalty is engagement, and punch cards keep engagement high because customers know they can get rewards from repeat interactions.
When customers get rewards, they recognize that engaging with your brand can benefit them, so they keep coming back to receive more rewards. Consumers are also more loyal to brands that provide them value, and rewards do exactly that.
You’re showing them you appreciate them.
Customers become loyal when they know you appreciate their business, and rewards are an easy way to show them that you do.
Instead of handing them a receipt and sending them on their way, you’re inviting them to come back again and showing them you appreciate that they come back by rewarding them. Rewards show them that you care, and showing them that you care inspires them to become loyal.
You’re creating an emotional connection.
Now, more than ever, customers make purchasing and loyalty decisions based on the emotional connections they can make with a brand. You can establish these connections by offering excellent customer service, valuable products and services, or repeat engagement from returning to fill out a punch card.
All of these elements work together to help you build a stronger relationship with your customers: the prospect of receiving a reward excites customers, so they’ll return until they can redeem their punch cards. Repeat visits allow them to get to know your business and vice versa, which creates an emotional connection. Emotional connections make loyal customers, and loyal customers will keep coming back.
Also, as these loyal customers make repeat purchases and receive rewards, you can learn from their buyer behavior and offer them even more personalized experiences that meet their needs — another form of inspiration for customer loyalty.
You’re giving them rewards for little additional effort.
Customers don’t want to feel like they’re embarking on a journey just to make a purchase; they want an intuitive process and quick solutions to their problems. Given this, minimal effort on behalf of the customer is a pillar of loyalty. Punch cards play into this, as they simply incentivize actions customers are already taking.
Essentially, customers don’t need to go out of their way or do anything extra to get a reward; they just keep doing what they’re already doing. Punch cards are low effort and convenient, but still provide value.
You can think of it like this: a customer comes into your store once a week to buy a slice of pizza. They like your pizza, and they probably like the idea of getting a free slice now and then, so they take a punch card. The punch card allows them to get a free piece of pizza by doing what they’re already used to doing; buying a slice of pizza from your store. They don’t need to put in any additional effort to receive the reward; they’re simply getting it by doing what they already do.
Use Punch Cards to Leverage the Actions Your Customers Already Take
Whether you choose to offer them physically or create a virtual system, punch cards are valuable tools for cultivating customer loyalty. You’ll leverage actions customers already take, which is making purchases from your business, and give them rewards to inspire them to keep coming back.
Originally published Mar 16, 2021 8:00:00 AM, updated March 16 2021