Loyalty Cards Systems ? Beware, Some Should Be Avoided

Recently, I discussed a loyalty card system with a vendor who was selling quite a number of his systems to restaurants. I was shocked to discover the lack of detailed information that this vendor catered for, and the opportunities the system he provided squandered.

The way their scheme works is that whenever a restaurant customer is presented with a bill, they provide their loyalty card to the waiter, who swipes it at the till. If the customer has accumulated sufficient points from previously purchased meals, he/she is awarded a rebate on the price of the meal.

This is simple price discounting based on repeat purchases. No other marketing activities are carried out - either by the loyalty card company, or by the restaurant - to proactively influence the number of times the card holder frequents the restaurant - they rely solely on the meal discount to attract customers back for more meals.

This is a system that is woefully underexploited.

I asked about the level of detail that was transmitted to the card site - and was once again disappointed - only the total meal cost was transmitted. The customer profile that was being created was extremely superficial. My view was further confirmed when I asked whether the 'significant other', or other family members' details were collected. Once again, no.

The key things wrong with this service offering:

• Lack of transaction details. These days, with broadband communication and high volume data disks, there is really no excuse not to collect data at transaction level.
• The simple act of recording the bill at individual meal item level opens up a wealth of information:

  • Number of main meals - if there are children in the family unit (provided during signup), analysis of the bill will provide a clear indication of whether the whole family always eats out, or if on occaision the parents treat themselves to a quiet night on their own - possibly anniversaries, or birthdays, or just a regular night away from the kids.
  • Types of meals - red meat, fish, vegetarian - which could be used for special promotions
  • Beer, cheap wine, or expensive wine drinker

  If you had the above information at your finger tips, who would you rather focus your marketing efforts on to get to come back to your restaurant - the family of six that buys budget meals, and drinks beer and soda, or 3 couples ordering starters, high-priced meals, drinking quality wine, and finishing off with expensive liqueurs?

• Even recording the value of the tip could be useful. A usually-generous tipper who awards a low tip (possibly to a new waiter) is giving a clear indication of a bad experience. This information could be used by the restaurant owner to contact the customer within a few days to establish what was wrong with the meal or service, and to invite the customer back with an offer of a generous discount for the next meal.
• Not getting the details of the 'significant other' and details of any children prevents marketing to special days. Its pretty pointless merely getting the birthday of the cardholder - it's not that compelling to get an SMS or postcard suggesting that you treat yourself to a special night out. It's far more effective to receive a prompt to take your significant other out for that special meal. Children's birthdays are another opportunity to encourage the family to come out to the restaurant for a slap-up meal -but this is only possible if you take the trouble to collect the data...

Hopefully the above points have provided some ideas as to how basic transaction data can be used effectively by an information analyst or direct marketer.

If you are approached by a vendor to implement a loyalty scheme, or you are thinking about calling for proposals from scheme suppliers, make sure that you investigate the level of data detail that each supplier collects.

If data is recorded at line item level - i.e. product ID, quantity, and price - then you will have a wealth of sales data that you can start using for a variety of campaigns. If they only provide you with a bill total per meal, then I suggest you look elsewhere for a more effective loyalty card scheme.

© 2005 Intellinova (Pty) Ltd. - All Rights Reserved This article may be reprinted, provided it is published in its entirety, includes the author bio information, and all links remain active.

For the past 20 years, Jeff Walters has been actively involved in transforming raw business data into profit-producing strategic information. He has worked in various data intensive sectors- banking, insurance, gambling, medical, government - leading several data-to-information projects: ABC Costing, analytical CRM, datamart /data warehouse development, and Balanced Scorecard.

If you want to convert your raw data into strategic assets, contact Jeff Walters through the following sites: Customer Relationship Management, or Direct Marketing

---

5 Tips for Getting the Most out of Exhibiting at Trade Shows

Exhibiting at trade shows can be a cost-effective way to... Read More

Loyalty Cards Systems ? Beware, Some Should Be Avoided

Recently, I discussed a loyalty card system with a vendor... Read More

Successful Surveys: 10 Tips for Better Results

Why would you use an email or online survey when... Read More

Costly Web Copy Pitfalls

One secret to a site that sells: Look at your... Read More

A Jack Of All Trades Is Often The Master of None

You've heard variations of that saying your entire life. Consider:... Read More

Network Your Way to Success- 12 Tips to Jumpstart Your Business

Lots of people network but few reap the rewards of... Read More

Marketing Strategy - Whats Your System?

Where Do Most of Your Clients Come From?Is it from... Read More

Nurture Sales Leads with Direct Mail Marketing

Direct mail is a cost-effective way to make sales and... Read More

Incentives For Customers? Whats New?

Lost & Found for the 21st CenturyHere in the 21st... Read More

How To Bond With Customers So That They Stay With You Longer

How many of your customers are loyal customers? More importantly... Read More

What You Must Know When Marketing Your Business

Marketing is both an art and a science. Anyone who... Read More

Will Googles Gmail spell trouble for Email Marketing.

We wait with baited breath for the anticipated launch of... Read More

How Prince Connects With His Target Market!

While Internet legend (and young pup) Frank Kern would have... Read More

The Biggest Needle In The Haystack

Hello everyone! Have you ever been curious about something, and... Read More

Effective Lead Generation

How to Gain your Prospective Clients' Attention and Generate the... Read More

Ready, Aim, Fire...Oops...Wheres The Target?

Everywhere you go on the Internet you find the words,... Read More

10 Simple Ways to Boost Your Sales IMMIDIATELY!

Alright you've got yourself a nice website with a great... Read More

In Sickness And In Health

I recently drove by a business that had a sign... Read More

Postcard Marketing Done Right

Say it with a post card. A well designed, colorful,... Read More

Marketing Without Ego

Our ego can get in the way of marketing our... Read More

Marketing Lessons From Apples iPod

Apple Computer just announced that their earnings from the last... Read More

The Seven Deadly Sins of Ineffective Nametags

Your nametag can be your best friend. It can be... Read More

Out of Sight, But Not Out of Mind

What's black and white and read all over? A newsletter... Read More

The Most Powerful Marketing Weapon Ever Invented

It was probably first discovered out there in the caves... Read More

What to Include in Your Marketing Plan Write-Up

For those new to marketing planning, the thought of completing... Read More

Image is Key to Your Marketing Success

In virtually any business first impressions are lasting impressions. Most... Read More

Full Color Postcard Marketing: 7 Reasons Why They?ve Become the New Direct Mail

The most crucial aspect of having a high response rate... Read More

Build Relationships

Personal marketing makes it easier to sell, by building relationships... Read More

How to Create a Countdown Marketing Calendar

Just like there are reverse dictionaries, there is a reason... Read More

How to Size an Emerging Market

In developing their business plans, companies of all sizes face... Read More

Common Exhibit Marketing Mistakes: Ten Tips on How to Avoid Them

The key to great exhibiting is marketing. But marketing is... Read More

The Secret to Adding Credibility to Your Business ? Testimonials!

You may not realize it, but you already have a... Read More

Practical Advice to Generate Successful Campaigns Using Merged Lists

You could end up with poor results when designing a... Read More