The Paperless Approach to Customer Loyalty
Digital loyalty cards are a modern and improved version of traditional plastic and paper loyalty cards. They make it easier than ever for small and medium-sized businesses to build strong customer relationships and drive repeat business.
Read this article to learn what is a digital loyalty card, its benefits over traditional loyalty cards, how a digital loyalty card works, and steps to create one for your local business.
What Is a Digital Loyalty Card?
A digital loyalty card is the digital version of the traditional physical loyalty or membership card. It is stored on customers’ phones or online accounts rather than taking up space in their wallets.
These digital loyalty cards generally operate through a web or mobile app and allow shoppers to collect points or rewards for purchases using their phones.
Purpose of a Digital Loyalty Card
This modern concept essentially replaces traditional stamp-based loyalty cards with a convenient digital solution. A digital loyalty card program enables small businesses to reward their loyal customers and encourage repeat purchases.
Compared to traditional loyalty cards, digital ones provide improved functionality for users along with valuable customer insights for brands. From affordability to built-in analytics, they solve major issues faced by conventional loyalty programs.
How Does a Digital Loyalty Card System Work
A digital loyalty card system rewards repeat customers by letting them accumulate points towards future discounts or free products.
Here is how it typically works:
- Customers download an app or access the loyalty program in a web browser
- They sign up and get a digital loyalty card in their online account
- Make purchases in the store to earn points
- Redeem points to get rewards like discounts, freebies, etc.
An automated system handles tracking points, sending notifications, and facilitating reward redemptions.
No paper coupons or physical stamping. The app tracks everything directly. Customers simply use their phones to earn points on purchases, check their balance and progress, redeem rewards, etc.
Disadvantages of Traditional Physical Loyalty Cards
Traditional physical loyalty cards come with numerous downsides. A major pain point is that customers frequently forget to bring their cards, missing out on point earnings and rewards in the process.
Paper and plastic cards can also easily get damaged and lost, erasing any progress made. This results in frustrated customers and lost opportunities to retain customer loyalty.
Did you know: According to a study, 79% of Americans say they would be more willing to join a loyalty program that doesn’t require them to carry a physical card.
From the business perspective, physical stamp cards provide no customer data or contact details, preventing targeted marketing.
For both customers and small businesses alike, traditional physical loyalty cards fall short compared to modern digital alternatives.
Benefits of Using Digital Loyalty Cards
Digital loyalty cards have many advantages over old-fashioned paper cards:
Mobile convenience
A digital loyalty card provides convenience to customers by allowing them to engage with the loyalty program directly from their smartphones.
Rather than fumbling through their wallets for a plastic card, a quick tap on their phone opens their digital card. This allows customers to earn and redeem loyalty points or rewards from anywhere at any time.
With mobile access as a key priority for consumers today, digital loyalty cards align closely with customer preferences.
Stand out from competitors
With consumers weighing their options amid a sea of competition, a loyalty program can be a key differentiator. Digital loyalty cards in particular make membership more appealing with mobile convenience and diversified rewards.
They also showcase brands as digitally savvy to customers who prefer progressive, tech-enabled experiences. Distinctive digital loyalty programs help bolster brand image and adoption.
Direct communication with customers
Digital loyalty card programs enable direct messaging between a business and its members. Customers provide their contact information like email addresses upon signup, which brands can use to send promotions.
This targeted communication keeps customers engaged in the loyalty program and incentivizes more frequent visits. The customer data also aids companies in improving products, services, and marketing campaigns.
Efficiency via automation
With a digital loyalty card, all member transactions and reward points earnings are automatically tracked in real-time. This saves employees time previously spent keeping manual tallies.
Point totals and redeemable rewards are displayed in customers’ accounts instantly as well. The efficiency also provides accurate insight into program usage to inform future iterations.
More customer insights
Transitioning from traditional stamp cards to digital loyalty cards allows the collection of vastly more customer data and insights via analytics.
Digital loyalty programs aggregate member profiles with behavioral trends including transaction histories, reward preferences, visit frequency, and patterns over time. Robust statistics offer customer insights to better cater offerings. Data-driven customization of loyalty programs keeps customers more engaged.
Environmentally friendly
By going completely digital, loyalty programs eliminate the environmental waste from producing disposable plastic cards. Each physical card ending up in landfills contributes to pollution.
Digital loyalty cards allow brands to promote an eco-friendly initiative to customers who increasingly make purchase decisions based on sustainability. This important benefit supports small businesses in building a socially conscious reputation.
What Is a Digital Loyalty Card App?
A digital loyalty card app is software providing the platform to run loyalty programs digitally online. The app allows a business to create and manage digital loyalty cards seamlessly.
Key capabilities of a digital loyalty card app:
- Admin portal to oversee the program
- Issue customizable digital loyalty cards
- Enable earning and redeeming points
- Track members’ transaction activity
- Send alerts and notifications
- View loyalty program analytics
Rather than building from scratch, the loyalty card app gives you the full infrastructure to launch your digital loyalty program with no coding required.
How to Set Up a Digital Loyalty Card
Here is the process to set up a digital loyalty card for your business in 5 easy steps:
1. Choose a loyalty app
When choosing a loyalty app, it’s important to find one that aligns with your business’s goals, budget, and capabilities. Look for an app that’s simple for both you and your customers to use.
RewardPocket
RewardPocket is a best-in-class digital loyalty card app for small to medium-sized businesses, requiring no IT involvement to set up and manage day-to-day. You simply create your digital loyalty card through an online dashboard.
RewardPocket enables you to set up your own points structure, rewards catalog, and more. It also provides the technology to instantly enroll customers by having them scan a QR code.
The platform makes it quick and easy to get started with a digital loyalty card that fits your brand. With RewardPocket, you can build an effective digital loyalty program without technical hurdles or high costs.
2. Set program rules & rewards
Next determine the loyalty program structure like point values, reward thresholds, expirations, etc.
Decide how customers will earn points—this could be 1 point per dollar spent, for example. You also get to determine what point thresholds translate into different reward levels—such as 50 points for a free item, 200 points for 20% off a purchase, etc.
Tailor rewards that make sense for your profit margins while still motivating the customer behavior you want, like more frequent visits and higher transaction totals. You can always tweak the program later based on data insights.
Strike the right balance between attainability and aspirational. The goal is to cultivate loyal customers who keep engaging to earn cooler rewards.
Pro tip: Diverse rewards works well to appeal to a range of customer preferences and budgets.
3. Customize your card design template
Personalize the design template of your digital loyalty card with your brand logo, images, colors, and more to boost recognition. Keep the overall look clean and simple for readability on small screens.
Make sure to prominently display essential info like your business name, current points, and QR codes used at checkout. A great card design reinforces branding and encourages customers to engage with your program.
4. Promote your loyalty card
Once your digital loyalty card is ready to launch, promote enrollment and participation in your brand-new loyalty program.
RewardPocket makes this easy by generating a unique QR code tied to your program. Print signage with this code for in-store displays. Add the QR code to your website, email campaigns, social media posts, or other marketing content so customers can simply scan to join.
Ensure staff mention the program during customer interactions. Offer an incentive for the initial sign-up, such as free bonus points or a welcome gift. Consider launching the program with special events, contests, or limited-time “double points” campaigns to generate excitement.
5. Analyze data insights & refine program
Track metrics like member signups, active usage, points earning patterns, popular redemption items, and more. See which rewards actually drive spending and which fall flat.
For example, you may spot that coffee gifts receive the most redemptions. Introduce a greater selection of coffee rewards or extra point bonuses for coffee purchases. Low visit numbers on Wednesdays? Add “Double Points Wednesday” to drive midweek traffic.
A digital loyalty card provides the flexibility to easily test and refine based on real customer data instead of hunches. This drives greater returns from your investment in building customer loyalty.
With a digital loyalty card app like RevieWise, creating and managing an effective digital loyalty program becomes effortless for any small business.
Try it for free for 7 days, or book a demo.
Key Takeaways
- Digital loyalty cards are a modern, mobile-based alternative to traditional physical loyalty cards. They provide convenience for both customers and businesses.
- Key benefits of digital loyalty cards include mobile access, automated tracking, customer data, and better customer experiences.
- A digital loyalty card allows customers to earn points, track their progress, and redeem rewards all on their smartphones instead of carrying plastic cards.
- Small businesses can easily create digital loyalty cards with apps like RewardPocket that handle the technology infrastructure.
- To create a digital loyalty card, decide on the points structure and rewards, design the card, promote enrollment, and analyze usage data to refine over time.
- Well-structured digital loyalty programs increase customer visits, spending, and engagement through diversified rewards.
Conclusion
While traditional plastic cards served past loyalty programs well, digital loyalty cards better meet today’s consumer expectations. Their simplicity, insights, and engagement opportunities assist small businesses in connecting with customers. The right loyalty app empowers teams to understand buyer behaviors and craft incentives that delight their very best customers.
Frequently Asked Questions (FAQs) about Digital Loyalty Card
What is a digital loyalty program?
A digital loyalty program is a technology-based version of a traditional physical loyalty card program. It allows customers to earn points and rewards from a business for their repeat purchases. Customer data and points balances are stored digitally through a website or mobile app rather than using physical cards.
Is there an app for loyalty cards?
Yes, an app like RewardPocket allows SMBs to easily create customized digital loyalty programs. Customers can store their loyalty card digitally and access the program via their smartphone, without needing physical cards or even downloading an app. They simply scan a QR code to sign up, earn points, and redeem rewards.
What is another name for a digital loyalty card?
A digital loyalty card can also be called an electronic loyalty card, mobile loyalty card, online loyalty card, or virtual loyalty card. All these terms refer to loyalty or membership cards that exist in digital form rather than as traditional paper or plastic cards.
What are the alternatives to punch cards?
The best alternatives to traditional paper punch cards are digital loyalty cards delivered via smartphone apps or online accounts. These allow customers to earn and redeem rewards in a seamless, convenient way without carrying physical cards. Going digital provides more opportunities for customer data and engagement.
What is digital loyalty?
Digital loyalty refers to customer loyalty programs that operate online or via smartphone apps rather than using physical cards. Stores can manage programs and track performance digitally. Customers can access their accounts and redeem perks directly on their devices. This provides convenience and incentivizes loyalty.