In the late 90s When American Airlines launched the first full-scale loyalty program called AAdvantage Program, it completely revolutionized the customer loyalty systems.
Though loyalty programs have been a part of business marketing since the late 18th century, they were not that effective.
Back then copper tokens were used as loyalty cards and slowly copper tokens were replaced by stamps. As we enter the modern era, the stamps were replaced by box-top coupons and loyalty cards.
Today almost all airlines have frequent-flyers programs designed to attract customers and every other business has some sort of loyalty program.
The way loyalty programs work has changed a lot in recent years. They are not what they used to be about 20 years ago. Digital loyalty cards or digital membership cards, whatever you called them are the new trends today.
There’s nothing wrong with the traditional way, but by seeing an increasing number of people relying more on smartphones for daily activities, it’s pretty clear that physical loyalty cards and stamps will soon hit a dead-end.
Digital loyalty card VS Physical loyalty Card – Which is Better?
The debate between physical and digital loyalty cards can be a little controversial if we have to compare them in today’s context. But if we analyze the marketing strategy that will likely be mainstream in the future, there’s little hope for physical loyalty programs.
Physical Loyalty Card
Customer loyalty plays a huge role in the overall revenue of a company. Before the internet, physical loyalty programs were sold like McDonald’s hot-selling items.
But today, traditional stamp cards and membership cards are less preferred by customers. As per a recent data study, 67% of consumers reveal that they somehow prefer digital loyalty cards over physical loyalty cards.
Though some businesses still use traditional loyalty stamps and cards, many are looking to integrate or many have already adopted the trend.
For example, American Airlines is one of the most successful companies in the world which has over 50K Executive Platinum Top-tier and 50K Delta Diamond members in the loyalty program.
They integrate both physical and digital loyalty cards into their loyalty programs. Their two popular cards are Virtual Gift Cards and Plastic Gift Cards.
This example tells us that the physical loyalty programs are not dead yet, it still works. The only problem is when you completely rely on it.
Digital Loyalty Card – Digital Wallet Pass
Digital membership cards are modern versions of loyalty programs that are managed through a customer’s smartphone on a Loyalty Card App or Loyalty App.
Compared to traditional loyalty programs, digital loyalty programs offer more flexibility and convenience.
From a business owner’s point of view, when you go digital you need not worry about printing stamps and distribution. With a few clicks on the loyalty app, you can create virtual cards and send them to your potential customers in just a few minutes.
From a customer’s point of view, it’s a lot easier to manage gift cards of different brands in one app. Another benefit is the convenience of carrying the cards. When you give customers a gift card, there’s a possibility that they might lose it and some might forget to bring it with them.
Digital loyalty cards cut all the inconvenience and make loyalty cards easy to carry and use. Loyalty apps are also highly interactive, intuitive, and convenient.
If you’re a business owner it’s high time you integrate a digital membership card into your loyalty program as customers’ preference is shifting from physical to digital.
In 2018, a CodeBroker surveyed loyalty programs and found that roughly 97% of millennials are engaged in loyalty programs through their smartphones.
Similarities
A digital loyalty card works much like a traditional card. In some contexts, digital programs run on smartphone apps are far superior to the traditional way.
- Retain Existing Customers – The primary motive of any loyalty program is to retain existing customers. In fact, the loyalty marketing technique itself was born to retain existing customers. Just like how you will traditionally retain customers, you can also effectively retain customers with a digital loyalty card.
- Increased Sales – Can a loyalty program increase sales? Yes, because existing customers spend more than new customers. Moreover, new customers are more attracted to stores and retailers with loyalty programs. In terms of sales, both physical and digital stamp cards have the potential to close more deals. But again, digital programs weigh slightly more than traditional ones.
- Customer Engagement – The reason why loyalty programs got so popular in the late 90s is that it opens up a whole new space for businesses and customers to connect. Unlike physical loyalty cards, a digital loyalty card makes it even easier to connect. With the help of loyalty apps like Shopuddy, both customers and businesses can connect in real-time.
Differences
We talked about how physical and digital stamp cards share similar features. Now let’s look at how they are different from each other.
- Marketing – Digital loyalty cards make it easy to market products and services to the target audience. It enables you to track recurring and new customers by tracking their purchases and card redemptions.
Unlike physical loyalty cards, you don’t have to record every transaction manually. You also get real-time data and get all things done automatically.
- Fraud Protection – Do you know? About 72 percent of loyalty programs have reported issues with fraud. Businesses that use physical stamp cards and membership cards are more vulnerable to fraud because stamps and cards can be easily imitated.
On the other hand, digital loyalty cards are difficult to imitate. Even if a hacker managed to jailbreak the app, they will still need access to customers’ accounts.
On top of that, the use of two-factor authentication (2FA) makes it even harder to hack any customer account. Just take Gmail’s two-factor authentication for example.
- Email Address – Any business involved in digital marketing will surely have come across the term “ Email Marketing.” Email marketing is one surefire way to leverage business earning potential.
With the help of digital loyalty programs, businesses can get the email addresses of their customers for free. Unlike traditional loyalty cards, you don’t have to ask for customer addresses and manually enter them into the list.
Email addresses can be used to inform customers about the latest product launch and new deals.
Give Your Customers the Convenience of a Mobile Wallet
Over the years, mobile payment has become one of the most preferred modes of payment for millennials and Gen Z. Any loyalty program integrated into a digital wallet is more likely to be successful than a physical loyalty card.
Mobile wallets are updated in real-time and help trigger customer attention. When customers see reward points or gift cards added to their digital wallets, the instinct to shop more takes over them, which leads to more shopping.
In addition to tracking all loyalty programs in a single place, users can also exchange points with others and redeem them seamlessly in every transaction.
For example, take the shopuddy digital wallet. You can use the wallet to send E-vouchers and E- rewards to customers in real-time. To apply for the shopuddy E-wallet click here.
Why Choose Shopuddy
With Shopuddy you can create a personalized digital loyalty card for your business and control your customer’s data and contacts with ease. Businesses can even set up their web portal where customers can manage their e-stamps and e-vouchers.
Shopuddy can boost your digital loyalty programs by integrating cross-platform e-wallet passes. We had helped hundreds of business owners leverage their businesses to a new height. You could be the next one. Create a free Shopuddy account today!
