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One Day One Idea: loyalty cards are useless. Make sure you don’t make them even more useless.

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Loyalty cards have become a useless instrument to foster loyalty (see our comments here). Yet, firms of all sizes still believe in its power. If you are one of those and are about to launch your own loyalty card, make sure at least that you can get some benefits out of it.

Don’t follow the example of Mamma Roma, a Brussels-based chain of pizzerias “al taglio” (exceptionally good by the way). They have launched their loyalty card and it’s a mere piece of paper which will become useless as soon as it’s given back by the customer.

The only information collected on the card is a name and an email address. According to our experience, in 50% of the cases this information will not be filled when the card is returned or will simply not be readable. Even worse the data will not be used by firms in most cases.


Advice for your marketing strategy

Paper-based loyalty cards are a useless instrument for firms: exploiting the data is a time-consuming process and most firms are not equipped for analyzing the data afterwards anyway. What is the solution? Loyalty cards are a good incentive to track consumers when checking out. This is what loyalty cards should be used for: collecting data on consumers’ behaviors and analyzing the data. If you’re in Belgium you may want to leverage the power of e-ID cards which companies like Freedelity are using as loyalty cards (and in a quite successful way by the way). This solution has the advantage to collect error-proof data and there’s a software behind it to manage your loyalty programs. The next step is to analyze the big data behind the consumers’ behavior and make something valuable out of it. This is the only asset of the so-called “loyalty” cards.

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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