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Card Power: The Core of a Successful Loyalty Program

The question facing most brands is: How do you increase the spend and frequency from your consumers? The purpose of our research was to uncover data and best practices around the use of cards within a loyalty program. We found interesting information on how to increase sales in a market where the “the next big thing” always seems to be changing.
Keeping your brand present, and prevalent, in the minds and buying behaviors of consumers is becoming more challenging. Consumers are bombarded with marketing messages, in multiple channels, and ensuring your message is heard and acted upon is every marketer’s desire.
Multi Packaging Solutions, Producer of loyalty and gift card programs, is seeing this trend become the new norm. Tony Haugen, Senior Vice President remarks, “We are hearing from many clients how important it is for them to keep existing consumers shopping, and bring them back to purchase more often. The value of having and executing a good loyalty program has become more critical and in-demand than we have ever seen before.”
Loyalty Program Market Update
It is well documented that the average consumer is in as many as 14 loyalty programs, and 80 percent of consumers state loyalty programs impact their purchasing decisions. There are many facets to obtaining loyal consumers, yet there is no question that by retaining your existing consumer base, you can achieve the biggest band for the buck.
Certainly there is a cost to running a loyalty program; however, the upside is great.  Members in programs tend to spend 30 to 100 percent more than non-members, and are more frequent in their purchasing. Furthermore, you should see a real profit uptick as well; research shows that a five percent increase in customer retention can result in a 25 to 100 percent increase in company profits.
In the marketplace, the conversation all seems to be about mobile, digital and social. Without a doubt, technology is adding exciting channels to engage consumers, and their impact will play a factor in the market, so it is definitely smart to incorporate these in your strategy. Saying that, here is the caution; these topics are new and cool, yet that doesn’t mean you will spend the majority of your budget in mobile or digital loyalty solutions. On the contrary, a blended strategy and one that is “back to the basics” might bring you the best results.
Give Them a Card
Cards have been around for decades and may seem like old news, but the market shows that cards are still trending, id they help power programs to success! Carrying a physical membership card gives consumers a sense of belonging, that they are part of something special. This has recent strategies seem to only want to run to mobile wallets and email blasts. Maybe it is time to reconsider the power of giving consumers a branded welcome to the program.
This past year, one brand tested a card-based program (one in which a card was given) compared to a card-less (digital only) program to a see if having a card in hand versus none offered had any impact on the activity and excitement from the consumer. They found that the consumer participation rate was 8 times greater in the card-based program versus not offering a card at all. Even though there was a savings by not producing a physical card; this was far outweighed by the participation and ultimately financial churn of consumer activity.
Mil Really Does Work
Yes, with all the excitement of social marketing, emails, SEO, SEM, texting and so forth, direct mail is still one of the best ways to engage consumers. In a recent channel preference study, the data supports this claim, as 51 percent of U.S. consumers stated they pay more attention to postal mail than email, 73 percent prefer direct mail for brand communications, and 73 percent receive emails they simply do not open.
Research by Ball State University concluded that in some cases, 70 percent to 90 percent of respondents made a purchase based on receiving direct mail. When a card is in the direct mail piece, response rates are even higher. Multi Packaging Solutions has seen this with several clients, as response rates have increased as much as 30 percent by combining direct mail with email marketing campaigns.
With this type of information, direct mail is a marketing channel that brands simply cannot ignore and should be a part of your strategy moving forward.
Gift Cards as Incentive Rewards
Gift cards have become the number one gift in the U.S., and continue to provide a tremendous revenue lift for brands. As far as loyalty programs, great (and successful) convergence is underway. The big idea is to use gift cards as incentives within your loyalty program.
How impactful can a physical gift card be? It has been found that gift cards are ten times, yes ten times more effective at driving incremental customer visits. A further look into why this is the case reveals that consumers find a plastic gift cards to be “something of value.” They place worth on a gift card and therefore on a reward card that acts like a gift card.
Card Power: The Core of a Successful Loyalty Program
A recent study shows that consumers who received a physical card as an incentive spent 43 percent more than the card value, and 55 percent of those consumers redeemed their card within 30 days. Another survey revealed that over 84 percent of consumers would rather receive a physical gift card than a virtual card. With this type of data, marketers need to continue to focus their strategy on what the consumers want, and are doing today.


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