LIVING OASIS have announced the launch of their own customer loyalty cards this week, offering a stamp for every £15 spent with £10 off the next purchase after the sixth stamp, an effective 11% discount — and for facebook fans of Living Oasis Sutton who are quick off the mark, there’s a bonus available (no, I’m not going to tell you about it: you’ll have to become a fan for yourself and hope Clarissa’s feeling generous).
But with so many of them around, do loyalty cards really work? What do you do to keep customers coming back to your store? And if you’re a customer reading this, what do you think we should be doing? Is it all about prices or is there more to it than that?
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June 11, 2010 at 12:42 pm
We have had a loyalty card here in SU for years. I don’t think it brings customers back particularly – I see it more in terms of our thank you to them
June 11, 2010 at 3:07 pm
I think ‘Loyalty Cards’ is a bit of a misnomer… it doen’t help create any particular brand loyalty. I have Starbucks, Costa, M&S and Millies and even McDonalds coffee “loyalty” cards in my wallet, and wouldn’t consider myself loyal to any of them… I go to whichever i happen to be nearest to when I feel the need for a caffeine fix.
I do think they have a tendency to encourage customers to spend more. This model is the same as the old WO model, and often (though possibly not often enough to warrant the cost of printing the cards, and giving away £10 worth of stuff) customers DID spend a few extra pounds in order to get a stamp. Were they more likely to come to WO next time? I doubt it, plenty still came in carrying CLC carriers.
Of all of the “loyalty” schemes I am enrolled in, I like Starbucks the best. I need to “load” my card with money in advance (which means i need to come back to them to use it) and when I do, i get ‘extras’ like free toppings, flavourings etc. I don’t really save money on my drinks, but have a much funner drink (with lots of extra bits) than I normally would shell out for.
We are looking at a similar scheme here at The Hub. Rather than giving money off books, we are looking at ways to offer “bonuses” when customers return to us regularly. I don’t want to say too much, because it’s still in the early stages, but we feel that this is a more exciting way to reward our customers than just ‘money off’ their purchases.
June 11, 2010 at 3:24 pm
Hey Luke, lol- green shield stamps comes to mind and I love that idea :0)
I know a few other businesses (wholesalers in various other trades) that operate a points scheme with a points based reward at the end of the year thing – and of course there is Nintendo stars. Points make prizes!
Actaully really liking the concept – I really admire your creative thinking here.
We have a reward card that’s similar to the oasis one and I have to admit it’s called a reward card because we see it as rewarding regular customers as we know it’s not a loyalty thing because as with WO and CLC bags we see lots of Waterstones bags.
I have to admit I also love the way Michael phrases it as a ‘seeing it more in terms of a thank you to our customers’, that’s a wonderful way of looking at things indeed.
June 11, 2010 at 3:43 pm
We’re thinking more along the lines of… perhaps… for customers who pay with their pre-payment cards, you may get a “Deluxe” version of a CD for the price of a regular… or maybe you’ll get an organic cotton shopping bag, instead of a boring and environmentally un-friendly plastic one… or maybe you’ll find a lolly pop in your bag… or sometimes it would be an unexpected £5 bonus “deposit” on your payment card.
Think of it like the o2 surprises when you top up.
One of my favourite shops in the area is a place called New Life.
It’s a charity shop which is more like a warehouse. They don’t sell second hand stock, but factory seconds.
What keeps me coming back (aside from Gap jeans for £2.99) is the way they do their offers… You don’t know what you’ll get till you get their, but when you do, it’s always something fun. It could be BOGOF on all £2.99 goods, or it could be free sunglasses with every purchase. I don’t know what it is… sometimes i go back a few days in a row and “chance” that tomorrow will have something cooler than today.
Like i said, we’re still fleshing it out, but we think instant, real and discernible rewards is the best way to keep customers coming back.
June 11, 2010 at 3:38 pm
Starbucks — sounds very similar to the Upfront Account scheme I introduced at LST a couple of years ago (see my Christian Marketplace article, July 2008, What Price Loyalty?). Works well, no card involved, all done by email: students open an account with a payment of £50, we credit their account with £55, send them an email statement whenever they charge something to their account, and offer another 10% bonus whenever they top up in any multiple of £25.
Just occasionally someone comes in, tops up their account to get the bonus but then immediately selects a pile of books to the full balance on their account, but most seem happy to leave their accounts in credit: a 10% bonus from us is much better value than they’ll get from leaving the money in a bank! The bonus, of course, has no cash value and can only be used towards in-store purchases.
June 11, 2010 at 3:52 pm
Yeah… a very similar idea.
Since it is more or less something you have already done, do you mind if I ask how you account for it, from a tax and accounting point of view?
Our concern, and the reason it has taken so long to materialise, is that we’re just not sure how to account for cash in out till, which has no ‘sales’ that relate to it, and vice versa, and whether or not creating “accounts” in this way means we are subject to FSA regulations.
Maybe this is a discussion beyond the scope of this comments section, but i would love to talk to someone with experience in this area.
You have our contact details (they’re on this very website)
Thanks for everything. Luke
June 11, 2010 at 4:09 pm
I’ve added a new tender type button to the till system, Bookshop Credit, which is separated out on the end of day sales summary. Bonuses are put through as Bookshop Credit rather than Cash, Cheque etc so they’re itemised but not included in the day’s totals.
A bit more info about the scheme in a facebook note I posted a while back: Want to make your money go further?
June 11, 2010 at 11:23 pm
We offer/operate a similiar pre-payment account scheme as outlined by Phil. Like him we have a dedicated credit account button on the till to enable accurate recording of sales.
Luke if you want I can send you one of our account and saving scheme leaflets – it has been checked over by Lincoln Trading Standards team and they said it was ok on our last semi-regular visit for a check and evaluation (being in a market building they come at least every 3-4 years as opposed to about every 6-10 years for a shop – lol!) – just let me know and I can either scan it or pop it in the post for you.
I also ran it past/consulted with bods at the FSB in preparing it – if you aren’t a member of the FSB (Federation of Small Businesses) I really do recommend them, great help lines with real sound legal advice on any number of issues, and a nice ‘care’ line set up as well, and some very good faqs and briefings on things too.
To be honest we don’t have that many takers as individuals for it though we have tried heavily promoting it – most prefer the reward card as it’s more what they are used to in other places and involves no upfront money.
We find groups and small churches make more use of it than individuals on the whole, but Walsall is quite different to Lincoln and I expect you may well have a better response to the idea than we have.
June 11, 2010 at 3:56 pm
I’m also liking Sainsbury’s checkout vouchers: I’ve got one here promising me £6 off if I spend £40 on my next purchase … and they’re working well: I get to around £30 of goods in my shopping trolley and think, hang on… another £10 of stuff is only going to cost me £4… off we go round the store again… get to the checkout and discover I’ve got £50 of stuff in the trolley… way to go, Sainsbury’s!!
June 11, 2010 at 4:41 pm
I actually think these are the best kind of offers. They determine where you will shop before you leave the house (i’m going to shop x this week, i have a voucher for them) and, as you say, mean you spend more just to make use of the offer.
The reality (As you said in you Marketplace article) is that there is no ‘right’ way to do it, just ways that may or may not work for you, and, as you rightly say, at the end of the day, you can’t buy loyalty, you have to earn it.
My inlaws have a house on the isle of wight… Tesco Club Card vouchers buy me ferry crossings… and yet i still don’t shop there, because their customer service has forever lost my loyalty.
I guess that says it all really.