Traditional Punch Cards vs. Digital Loyalty Card App – Which is better?

Traditional Punch Cards vs. Digital Loyalty Card App – Which is better?

If you’re reading this, you’re probably already clued on to the fact that a customer loyalty program is essential in expanding your customer retention and increasing brand loyalty. Now it’s just a matter of whether to opt for a traditional punch card or a digital loyalty card.

So what are the pros and cons? The term “customer loyalty program” used to inspire images of a classic punch card with 10 squares printed on it, 6 of which have a coffee-shaped stamp or hole punched into them, the other 4 squares standing between you and your free coffee.

However, a loyalty card app can now put these traditional paper punch cards onto your customer’s phone.

Here are some factors to consider when choosing a digital loyalty card app for your business over the original punch card system.

Whether you’re opting for old school punch cards or a digital loyalty app system, both options are quick, easy and cheap to implement.

While the app may come with higher upfront costs, the ongoing costs of maintaining a punch card system quickly surpass that of a digital loyalty program app subscription for your business.

Once your digital loyalty card app is set up, there is never any need to replace or reprint updated cards – the app will automatically reset your loyalty program once the reward has been triggered.

How Much Does A Loyalty Program Cost?

Considering that five billion smartphones have been sold and more than 75 billion apps downloaded worldwide, it’s safe to say that any given customer is probably going to have a smartphone in their pocket. Therefore, they are able to have a loyalty card app in their pocket too.

With a digital loyalty card, customers will always have their card on them, and they know exactly where and how to find it on their phone rather than fishing through their wallet.

Which brings us to our next point…

3. Card Retention and Management

The days of carrying around big bulky wallets with wads of paper cards and coins are behind us – these days, wallets are getting smaller or simply ceasing to exist, as more and more people gravitate towards a phone case with a cardholder or simply use their smartphones or watches to make payments.

If you ask someone whether they have any paper punch cards, chances are they’ll have a wad of them stuffed into a drawer or stashed away in an old cardholder at home.

They won’t be carrying that wad of punch cards around with them everywhere they go, and if you own a cafe or salon, that customer’s loyalty is lost along with their punch card.

4. Customer Demographics

When deciding whether to run your loyalty program with traditional paper punch cards or a digital loyalty card app, you also need to consider the average age group of your customers.

It’s no secret that millennials are highly digital-oriented. 9 out 10 millenials own a smartphone and have been brought up relying on technology.

So considering that this generation is tech-savvy and highly connected, it is no surprise that Millennials are drawn to digital loyalty programs.

In 2018 survey by CodeBroker, more than 440 Millennials belonging to loyalty programs from retail, credit cards, restaurants, travel and other industries were surveyed and it was found that 97% said they would actively engage with loyalty programs if they could access their rewards information directly from their smartphones.

Considering that millennials now also have more spending power than any other generation, this makes the needs of this generation very important segment to cater for if they are a part of your target audience!

But not everyone shares this enthusiasm for smartphones and the digitalisation of customer loyalty. Those from the “Silent Generation” are at least 75 years old by this point, and are generally much less reliant on smartphones than those of us from younger generations.

For people who are 75 and older, punch cards might still seem like a more reliable option than a digital app. Last year, digital rewards system developer CodeBroker conducted a survey that found many participants weren’t willing to sacrifice smartphone storage for a loyalty rewards app.

Having said that, businesses can always offer paper punch cards as an alternative. It’s easy to implement a digital loyalty card system and also have a more basic system using the traditional punch cards for older customers.

5. Security and Fraud

One of the biggest benefits of a digital loyalty card app system is that every transaction is recorded and documented – who, when and where. It’s extremely straightforward for any business to sift through their loyalty card app transactions, which is great for security and fraud.

There’s a café in Sydney that was recently losing hundreds of dollars each month in free coffees that were showing up in the business’s loyalty card app but not on the cash register. Through investigating the time and date of these transactions on the app, management were able to ascertain that a staff member was committing fraud.

The downside of sticking with punch cards is that there is no “paper trail” (excuse the pun).

6. The Business-Customer Relationship

This comparison is quite simple – with punch cards, the relationship between the customer and the business is one-way. With a digital loyalty card system, it’s a two-way relationship.

A digital loyalty program opens up the lines of communication between the merchant and their loyal customers through special offers via text message, push notifications or email.

The customer doesn’t need to be physically standing in your store at the point of sale to reap the benefits of being loyal to your business.

This ties into the above – with two-way communication available via digital loyalty programs, the business can obtain helpful data such as customers’ birthdays, previous transactions and preferred products.

This allows you to offer special birthday deals, friendly reminders and special offers to encourage customers to return, and discounts in exchange for filling out surveys which in turn help the business to evolve and achieve 100% customer satisfaction.

Given that a recent Forbes survey found that 62% of millennials claim they are more likely to become a loyal customer to a brand that engages with them online, this one is a big “plus” in the digital loyalty app column.

8. Versatility

In regards to versatility, digital loyalty apps are the clear winners. Originally, the whole point behind punch cards was that they were small, convenient and basic. They were designed for one offer that would never change, like “Get Your 10th Car Wash Free” for example.

But while punch cards are restricted to singular offers, the digital option allows you to provide various interchangeable offer types across multiple locations. An app can provide customers with countless options for different offers and special deals that suit their specific needs.

So there you have it… traditional paper punch cards vs a digital loyalty card app, the pros and cons of each. Which is more suitable for your business?

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