One of the main parts of a loyalty program is usually allowing members to collect either points, stamps, or badges. There is a wide variety of options that are suitable for each company’s needs. However, when choosing the optimal option for the exact program, several factors need to be taken into consideration. It is important to do research about the capabilities of a loyalty program and how it may fit in with your budget, the age of your customers, and their preferences. But you may wonder: how did the concept of loyalty programs and collecting incentives begin?
It all started in the XVII century when merchants came up with the idea of copper tokens that could be redeemed for goods or purchases. The main aim of this was to encourage buyers to purchase from a certain shop as a way of building a connection and sense of loyalty between the seller and the buyer. This was the beginning of the idea of loyalty programs. Over the years, the mechanism of exchanging tokens for goods has transformed and taken many different forms. This is often seen as plastic or cardboard cards with which customers could (and still to this day) collect stamps and stickers in cafés, at the hairdresser, or in local grocery markets.
Digitalization has led the way for a new system. Classic cards are replaced by mobile apps. Due to this change, loyalty program providers can stay in constant contact with their customers and can prepare a more personalized program for each customer. It is worth mentioning that mobile apps facilitate faster communication with customers. This change also allows companies to reward customers for actions connected with buying, like referrals or advocating for their company. Before the digital transformation, this was nearly impossible to achieve. Finally, with a mobile app, customers can build a community of people who share habits and interests based on their loyalty experience and also compete with each other by completing quests.
But is it worth forgetting about a classic stamp or sticker collection and switching fully to mobile apps?
There is no doubt that mobile apps are a convenient way to take part in a loyalty program. There is no need to remember to bring a card around whenever purchase is made. Personalization based on purchase behaviors is a great advantage. As mentioned earlier, it is important to get to know customers that are most likely to become members. Loyalty program providers should not consider resigning from stamps, but instead think of how to convert them to the 21st century. This is where a mobile app comes into play. With many possibilities such as gamification, rankings, and progress bars, retailers can upgrade collecting the customer experience of their clients in the digital world.
However, when deciding whether to use old-school cards, it is important to mention the main disadvantages when it comes to classic stamp collections. The main issue is that there is often fraud involved. Therefore, it is important to create protection like watermarks or individual numbers that are difficult to forge. This itself makes this solution more expensive than one might assume. Another con of this solution is that collecting information about personal shopping habits is difficult, so keeping a communication flow with these customers requires much more effort. It is also worth mentioning that these transactions may cause some issues, e.g., missing transactions or losing/forgetting a card.
In conclusion, deciding if it is worth it to use both stamps and mobile apps or using them separately depends on the needs and aims of the program. It is important to remember that digital solutions are pricey, but from a long-term perspective, data collected via mobile app is easier to gather, module and use to create a tailor-made program and will create a new communication channel. This does not mean that stamps are a bad solution. It may be wise to consider introducing e-stamps that can resolve issues regarding physical stamps/stickers and at the same time maintain a sense of physical achievement when customers reach certain levels of the program, which might be a driving factor for a customer to choose to join a particular loyalty program.
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