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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:
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
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