Digital or Traditional Customer Loyalty Programs?
The traditional way of customer loyalty programs is by making a loyalty card. This is where customers can collect stamps on their loyalty card until they can get something for free. For example, the first time they buy a cup of coffee at your cafe, give them a loyalty card stating buy 10 coffees and get one for free where they will come back to collect stamps. This is also common at car wash centres in order to retain their customers.
There are many pros and cons of using loyalty cards. The advantages of using it is that loyalty cards are simple and easy to implement. The way of using it is also very straightforward and fact that implementing it is not expensive at all. The return on investment for using loyalty cards is very much secured. However, using loyalty cards has multiple disadvantages as well. That includes cards easily get lost or forgotten, it is also lack of data meaning that marketing and rewards cannot be targeted. (SOURCE: Jayu Rewards)
But as time goes by, a digital version of a loyalty program might actually be more convenient rather than a loyalty card. It also caters to more types of items we want to get repeat customers. One of them is by using an application linked to their membership card. Or sometimes just solely using an application.
An example from Starbucks is that they have multiple rewards in the application. If pay using the membership card or on their application, it will link to all the rewards in the application. Some of it is getting a complimentary beverage with the purchase of 10 beverages, complimentary classic doughnut or muffin with the purchase of 10 food items, and even a complimentary beverage with purchase of any tumbler or mug.
Despite having all of those in the application, it is still hard for all different ages to use it. This is because some older people may not know how to use the application. Not only that, the cost to start up a digital solution like this may be more costly than using traditional loyalty cards.
All in all, both digital and traditional customer loyalty programs are still relevant to this day as the world is yet to get 100% digitized. A store or company needs to learn their customer behaviour and choose what’s best for their business.