Loyalty card

Loyalty cards

80% of the profit in any business is the merit of regular consumers of goods or services, who make up only 20% of the total number of the company's clients. This fact is known as the Pareto principle (in honor of the economist and sociologist who established this pattern) and has remained unchanged for over a hundred years.

It is for this reason that most companies are trying not only to find new buyers, but also to turn them into permanent ones, thereby guaranteeing themselves a consistently high profitability. One of the most popular tools used to achieve this goal is loyalty cards.
A loyalty card is actually a document that provides its owner with additional benefits that other persons are deprived of, thereby making him a privileged client. Today, to obtain a special status, it is usually enough to make only one purchase or use any of the company's services. In some cases, loyalty cards can be issued for an additional fee.

According to the types of benefits provided, there are several variations of loyalty cards.

Regular discount cards - loyalty cards, the presentation of which gives the client the right to receive a discount, most often set in the form of a certain percentage of the purchase amount. In some cases, the cost of services and goods for their owners is immediately indicated on the price tag or in the price list.
Pros: insignificant costs of issuing cards, no need to maintain a purchase history to determine the size of the discount.
Disadvantages: most competitors have similar cards, reduced profits due to discounts for most customers.

Accumulative discount cards. In this case, the amount of the discount is not fixed and increases with the purchase of goods / services. Upon reaching a certain threshold of the total amount of purchases, the discount increases, for example, from three to five percent, etc.
Pros: the client's interest in making new purchases and the presence of a motive to increase their value.
Cons: a large discount for regular customers, the need to keep track of purchases, which can be implemented by issuing more expensive cards with a chip or barcode.

Loyalty bonus card... This card, in fact, is also a kind of discount card, but in this case the discount is provided not as a percentage of the value, but in the form of points equivalent to monetary units. The client has the right at any time to pay for the purchase with them on a par with ordinary money. Most often, firms impose a limitation on the amount of bonuses used for each product, or the validity period of the points, after which they “expire”.
Pros: the size of the discount in this case is minimal, the motivation to purchase goods constantly in the same store is quite high, the client strives to use his bonuses before their expiration (for temporary bonuses).
Cons: difficulties with tax accounting of such loyalty programs, the need to use cards with a chip or barcode to identify a client in order to accrue and write off bonuses.

VIP cards... This type of card helps to increase loyalty by providing the client with special conditions or additional services. These can be free delivery or transfer, free access to a special enhanced comfort zone, etc.
Pros: the actual absence of loss of profit, high attractiveness for the client due to the possibility of obtaining a VIP-status.
Disadvantages: The need to develop a truly effective proposal that can be easily implemented.

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