Of course loyalty cards are on the way out. Customers usually forget them and they don’t even stimulate loyalty – the reason for their existence – so is an app the answer?
The Eat chain of sandwich shops believe that this is the future because they can see so much more information about the behaviour of their customers. The tradition in most coffee shops has been to stamp a card each time a coffee is purchased – when the card is full then the customer has earned a free cup of coffee.
But the card is discarded and the company knows nothing about the customer. With an app organizing loyalty points for various retailers, the coffee shop would know that you are not only owed a free coffee, but that this is your 500th cup of coffee from that particular café – perhaps breakfast might be free with a milestone like that?
In general it is going to be better for the retailer and customer to use phone apps to organise loyalty schemes. The customer no longer has to remember cards or vouchers and the retailer can see a much more complete picture of the customer behaviour – leading to more relevant offers.
However, there are two issues that I see with the move away from more traditional loyalty schemes. The first is that customers may feel bombarded with offers and information – it could become too much to be seeing endless updates on their phone suggesting offers from this store or that café. And at present there yet to be a single dominant central way to organize all loyalty schemes on your phone – nobody is going to download a new app for every single retailer, we need a central app that is independent of the retailers, but can handle all of their loyalty schemes.
There is a lot of change ahead in this area. What’s your opinion? How quickly do you see the market for loyalty apps developing? Leave a comment on the blog here or tweet me.
Photo by Ewan Munro licensed under Creative Commons