Thursday, July 01, 2010

The Future Of Loyalty Cards

Loyalty cards and loyalty reward program have been around for a while. Most of the time, they are the central core of customer relationship management strategies. Companies spend fortunes to create those cards, but also to maintain them.

Hence, a company like CVS is counting 60 millions cardholders and Best Buy for about 40 millions.

Now I don’t think loyalty cards are going to remain as they are right now. Mobile technologies might give a real boost. Indeed, why would you keep actual cards in your wallet, while you may have them all integrated into an application?

There is a simple rule that I have learnt while I was studying customer relationship management and more precisely loyalty reward strategy with Michel Raicovitch, that people usually own a maximum of 5 cards they carry with them at all time. This is actually pretty few when you think about it, as most retail chains propose their own. If you are not into these cards, people don’t believe your program is worth it, and won’t use it, which ultimately leads to not getting data about your customers.

Now I have found this very interesting video on Youtube, about a new company called Cardstar. This company proposes you to enter in their applications all your loyalty reward program, in order to avoid to keep all those plastic cards. While shopping, you simply scan the code bar on your smartphone, and then the cash desk will recognize your profile.

Of course, you will also be able to get rewards and coupons thanks to this application, as a regular loyalty reward program would.

I believe it is a very smart idea, and what is very interesting about the service this company propose to business and shops, is that you will be able to have data from customers when they don’t visit your shop.

The program counts 700 different loyalty cards, which shows the potential of the idea to have a single application combining all of them.

For myself, top of the mind, I should have at least a dozen of those loyalty card on me. So it would obviously be more convenient to have them all on my phone.

A lot of new things are happening right now around loyalty reward programs and mobile devices. This is pretty exciting