Loyalty Cards – How Many is Too Many?

We all like to be treated well by companies we use frequently and the loyalty card is the simplest tool at a marketer’s disposal to identify your best customers. Used well they’re very effective – they keep a customer using your airline, even when the others are more expensive, they allow you to track customer behaviour and target your marketing efforts more effectively.

There’s just one problem – they’re a huge pain to carry around. In this image there are cards for a restaurant, a cinema, a coffee chain, a drugstore, an airline, a hotel chain… It’s all very well for marketers to assume that a customer will only have their airline’s loyalty card in their wallet, but what about all the other companies? Supermarkets, petrol (gas) stations and every other loyalty card scheme are all vying for space in your already over stuffed wallet/purse/pocketbook.

Some supermarkets have figured this out, they give you a different piece of plastic with a number on – a small card to go on your keyring, so of course you can’t leave home without it – that works fine until you end up with 10 of them on your keyring and your bunch of keys won’t fit in a pocket any more.

As Guy Kawasaki says ‘never ask someone to do something you wouldn’t do yourself’. Loyalty marketers need to consider this: would you carry around a wallet full of plastic just for the, at best, 10% benefit the card earns you, if you remember to show it?

If only there was a universal card that everyone carried…

All a loyalty card does physically, at best, is carry a unique identifier. You usually have to fill in a form when you get it, parting with various pieces of personal information. There should be an option on these forms for you to enter the number from a piece of ID that you always carry. A National ID card in a lot of countries serves this purpose. For Brits or Americans, it would be the driving license. Make the hardware that’s used to scan the loyalty card also capable of reading the various types of ID card in use. Oh, and tell people ‘you don’t need to bring this piece of plastic with you providing you’ve got this other piece of ID you’ve registered with us’. The tinfoil hat brigade are happy – this is optional – and the rest of us don’t have to carry around a huge pile of plastic cards.

What are the potential pitfalls in doing this?

1. Customers may forget they have a ‘loyalty card’ and spend their money elsewhere instead

2. No analogue backup to enable you to check someone’s account if your database goes down

Point 1 is easily dealt with – if the only thing that enables you to retain a customer is a piece of plastic then you have bigger problems; you’ve clearly not been marketing to them effectively and your service is lacking too. As for point 2, that’s an internal systems issue, nothing to do with your customer. If someone says they’re entitled to the top level of discount offered by your loyalty programme, give it to them. Your clerk can always take the customer’s details and enter it later. If it doesn’t check out, so what, you’re still making a profit on your best customers aren’t you?

This problem’s going to get worse as it gets bigger but if you’re a loyalty marketer I implore you to consider this as an option to provide to your customers.

UPDATE 2009-05-30: An iPhone App by CardStar, profiled by Mashable, looks to solve the problem, for iPhone users at least – providing the merchant can scan your barcode (or will accept typing the number in) – sounds like till operator training is required more than anything. One of the commentators on the Mashable piece said that he just took pictures of his cards and saved them in an album on his iPhone.

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