Which type of loyalty plan will benefit my business?
Every business has the goal to keep customer retention high while growing their new sales. But to achieve this perfect growth, we have found it important to make sure you are choosing the loyalty program best tailored to your company! Observing the category of your business can directly show you which plan works best. Whether that be a punch card or points system, we know it can be hard to understand which will improve your company while being exciting for your customers at the same time. So here are some helpful examples of highly successful companies with different strategies that are taking advantage of the plan that best suits their goals!
Pinkberry: Punch Card System
We all know and love Pinkberry, and as a popular frozen yogurt franchise, Pinkberry has learned that it can greatly benefit from a strong punch card system because of their simple menu. Their Pinkcard plan allows any customer to receive a free yogurt after 10 purchases, as well as on their birthday! But why is it so successful? Well, first it’s extremely simple. Second, their customers quickly get excited about reaching a discounted or free item in the future that they already know and love. This gives the company better customer return which has increased sales.
Sephora: Points System
Sephora is another well known international company that holds customer loyalty in high regard. However, Sephora’s quantity of merchandise and varying price points greatly differs from Pinkberry. Instead of strongly focusing on one product, Sephora sells many different items, making a punch card system practically impossible. So instead, they have chosen a points system that never fails to perfectly cater to all customers, regardless of what they purchase. With Beauty Insider, Sephora enables customers to quickly reach a “never-ending supply of beauty rewards”. With every item purchased the customer receives a point that leads them closer to their next beauty gift, including one on their birthday.
So which type of plan will work for me?
First, you must look at your company goals. Are you trying to sell one or a few basic products? Or does your business sell a multitude of different items in a large price range?
Selling a limited range of products: Go for a punch card system! This is a great way to get customers excited. Because who doesn’t love the word “free”? If you have a product being repeatedly purchased, this is the best choice to see positive outcomes. It is a direct incentive for your customers to keep returning and focus on your business rather than the competitors. This system works extremely well for companies such as cafe’s, frozen yogurt stores, car washes, and more!
Selling various products at different prices: If you are a company selling a variety of items or services, a point system is definitely best. With each purchase a customer can earn points and eventually earn a free or discounted item. A favorable aspect of a points system is that the customer might buy something in your store to receive points instead of at a competitor. This creates an opportunity for your sales to increase and turn your new customers into repeat customers. A well implemented point system has the power to alter a customer’s buying habits without hurting your margins. Some types of businesses that benefit most from a point system are restaurants, hair salons, and department and retail stores because of their wide range of products, services, and prices.
By Katelyn Fletcher