Monthly Archives: April 2010

Discount Card Drawbacks

A number of people have recently mentioned Discount Cards to me and have asked my opinion of their effectiveness. Quite simply I don’t think they are really effective for most businesses – the only exceptions being those who rely almost totally on tourism. Most businesses however would prefer to have returning customers rather than have to find new ones every day and Discount Cards do little to help in this regard.

There are 5 main reasons why Discount Cards are not an effective business tool but before we take a look at these we need to define what the card is:

A Reward or Loyalty Card allows a business to issue points according to set criteria such as Euro spent, number of visits etc. They are distributed for free and the customer typically needs to register the card by providing their contact details.

Discount usually cards provide a simple set discount per purchase (though they can work on a tiered basis) to all customers. The user typically pays for the card and does not need to prove the business with any personal details.

So what are the 5 reasons why Discount Cards are not an effective business tool?

1. Regular Customers Are Alienated

Discount Cards force you to give the same discount to discount to all cardholders. Since there is no way to target the discounts to give loyal customers greater benefits they can be alienated by seeing first-time customers get a discount which they themselves cannot avail of – especially when they know the cardholder has paid someone for that privilege. Understandably regular customers think they deserve something for their loyalty and ideally would like to see the rewards increase with the number of visits.

2. There Is No Information Collected

Discount cards provide no way to track their usage. A business might see high usage of the card but there is no way to see if this is the same card being shared between different people or if it is a large number of individuals, no way to identify if customers use the card more than once or if they visit the one time and never return, and no way to gather information for marketing campaigns. This lack of information prevents the business form using it to help in developing their business.

3. Focus On Single Transactions

Discount Cards require you to provide a set discount on single purchases and to do so for all holders. This does not provide the business with a way to encourage repeat visits. A Reward Card allows customers to build up points over time and so not only rewards the regular customer but also provides encouragement to return.

4. Uncertainty About Distribution

Because discount cards are usually sold to the public there is no way to guarantee the number distributed. It is not possible for participating businesses to know how many cards will be distributed or how long it will take to do so.

5. High Cancellation Rate

Because they are required to pay for the card there is typically a very high percentage of customers who will not renew for the second year. As a result it can provide an initial false indication to businesses of the ongoing success of the program and does not provide a foundation on which to plan the future.

Discount cards are useful for businesses which rely highly on new customers because they provide a reason for someone to visit once. What they do not do is encourage repeat business or provide the information a business needs to plan their future.


Maps and Locations

One of the key requirements for any business is to tell people about you…and to let them know how to find you! has provided the ability to describe your business and your Reward Program for some time. You have a unique URL which you can provide to people on card, in literature, or on other web links. Recently we added a map to this businessdetails page as shown here…

We have tried to automate the placing of businesses based upon the address. This works ok but is not always as accurate as we (or you) might like. Today we’re improving the service by launched the ability for you to place the location yourself or to fine-tune our attempts.

This feature is available on the directory edit page (Under the Communication section) where you can already enter your business description and the details of your reward program. There you will see the current location we have and can click on that map to show  larger interactive version. Simply drag the marker to your business and click save.  You can zoom in and out of the map and can switch between a map and a satellite view to help you place the marker accurately.

Changing your location marker

This is a simple operation but one that can help you better display your business to visitors and help them find you.

Introducing SingleScan was designed from the outset to be a flexible solution that could meet the needs of all businesses. The method for awarding and redeeming points reflects this as it involves the business typing or scanning three pieces of information: the card serial number, the number of points, and the reason. For the majority of businesses this works perfectly and they can award points based on spend or other criteria.

However there are some businesses who will always award and redeem points in set amounts. Businesses such as clubs may award points per visit, pubs may award a point per pint and give every 10th pint free, cafes often do the same with coffee. While these can program the scanner to allow the points to be awarded with just a scan of the customers card it is a clumsy and awkward process. One made obsolete today with the introduction of SingleScan.

SingleScan is an optional feature that allows a business to set up the automatic awarding of points when the customers card is scanned. Now all a club or cafe needs to do is turn it on, decide how many points to give, and scan each customers card once. The system will look at the preprogrammed values and enter these.

Here is a comparison of the normal screen for awarding points and one with SingleScan turned on…

Standard Method For Awarding Points

SingleScan turned on

As you can see the SingleScan page is greatly simplified. All the business needs to do now is scan the customers card and points are awarded automatically. The customer still sees their transactions online and the business has a streamlined system. One where they can change the points directly rather than having to reprogram a scanner.

SingleScan can be turned on or off for Awarding and Redeeming points individually under the Options section.

The introduction of SingleScan will not impact on the majority of businesses since most of them want the flexibility of awarding points based on more complex criteria. These businesses can safely continue using as before. For the other business such as clubs, cafes, etc this will make the process much simpler. It’s just one more step in the continuous addition of features to and there are more to come.