19 Nov
Suppose you are an independent merchant. You want a loyalty program because you want to get your regular customers spending more and you want to find a way of guaranteeing that spend by rewarding their loyalty. What do you do?
A lot of merchants consider plastic loyalty cards. This is a big mistake. An even bigger mistake than cardboard. The one thing to be said in favour of cardboard is that it is cheap. For a busy coffee shop or hair salon, handing out paper cards to all comers is no big deal. It costs them maybe £10 a month. If it’s a thriving business, they won’t notice the cost. Plastic is quite another matter.
Plastic requires a big up-front investment. To start with, you need a lot of the stuff, packs and packs of it. You’re not going to do this unless you believe that at least a thousand of your customers are going to use the things. All these cards have to be individually programmed and stamped. The merchant needs an expensive card reader to do all this, some sort of device taking up space behind his counter which can do nothing other than program these cards. And what happens to these precious cards once they’ve emerged from the merchant’s forge into the light of day?
There is a possibility that, in appreciation of the effort and expense the merchant has invested, the customer will take the cherished card and place it in a privileged place in his wallet/her purse. The more likely scenario is one of the following:
1) She throws it in her bag with the intention of putting it in a ‘safe place’ when she gets home. She next comes across it years later when she’s throwing out the bag.
2) He is more meticulous and puts it in his wallet next to his Tesco, Nectar and Boots cards. A month later, realising that he will not use the card again for some time, and that his wallet can hold no more than a few big brand cards, he places it carefully in the top drawer of his bedroom table.
The next time they visit the shop they realise they’d got a card but did not have it with them. So they get another. Then they go through the same loop.
From a pure merchant point of view, plastic loyalty cards might seem a good idea. From a customer point of view, they make no sense at all. Most people will tolerate two or three plastic cards in their wallets. Their local supermarket will be covered, and maybe petrol and chemist. Places they know they will be visiting –places they have to visit, whether they like it or not. A plastic card is something you hate carrying for something you hate doing – like the weekly supermarket shop. One thing you are not likely to do is carry plastic cards for your local coffee shop or restaurant.
Consumer tolerance of plastic cards is very low, and it’s higher now than it will ever be. Soon they will be antiquated, like diaries and filofaxes. Even the big supermarkets will have to dump their cards and move to smartphone, but being big and slow, they’ll be the last to do it. So why imitate the supermarkets and inflict such an expensive and useless loyalty program on your customers? Why be big and slow when you are small and nimble? It’s not like the world needs more plastic.
