The Role of Loyalty Cards in Market Towns

Hannah Bowden, amt-i, Action for Market Towns’

Research Consultancy

Research Report. Sponsored by Savvy UK Ltd

Research Objectives & Methods

• To understand the role of loyalty cards in market towns and how they can be used to maximum effect.

• A literature review and interviews with a sample of existing (or soon to be launched) schemes.

• Technology typology used to categorise schemes

Role of Loyalty Cards

• Loyalty cards defined • Cards examined in the context of:– Marketing and Promotions – Planning and Capital Investment

Reasons for Implementing

• External threats• Increase Footfall/Trade• Increase a sense of community• Publicise and celebrate independent business• Multiple existing loyalty cards • Need to be as competitive as possible

Reasons for Chosen Approach

• “No Tech” or “Low Tech”– Cost– Assumptions about asking businesses to pay– Consultation with businesses– Coopertition

• Hi Tech– Loyalty vs. Discount– Track rewards– Monitor spend patterns– Use as a marketing tool

Implementation

• Idea Generation• Working Group Established• Stakeholders Identified and Contacted• Consultation and Networking• Funding• Promotions• Launch

Operations

• Working or Steering Group 3 -12 people• One or more part time council officer(s)• Set up time few weeks – 6 months• Ongoing administration – Part time administrator– Existing council staff– Businesses

Promotion

• Report lists the range of promotions employed

• Key themes:– Personal contact– Promotion important but doesn’t have to be

extensive– Two fold – to customers and businesses– Start and long term– Local press

Costs

• Wide variation reported £560 – 200,000• Larger programme of promotion• Administration support and assoc costs• Cost of discounts • Card sales, reader rental and offsetting

through sales

Funding Sources

• Town/ District/County/Borough Council • Regional Development Agency• Local Strategic Partnership

• Chamber of Trade & Commerce• Local businesses/retailers• Corporate Sponsorship

Customer Rewards• No Tech– Discretionary Discounts; percentage and items

offered on– Discounts on presentation of the card– Money off vouchers– Monthly draws• Hi Tech– Points awarded for spending £1 = £1 point – Points ‘saved up’ and exchanged for Vouchers– Discretion on min purchase level and how vouchers

used

Customer Data

• Personal data collected via application forms• No tech and Low tech experimented with

manually collecting customer spend information

• Some schemes have set up databases for marketing purpose are but not yet using them

• Linking personal data to spending patterns cited as industry best practice

Outcomes

• Generally positive response• Only one formal evaluation which was part of

wider programme of promotions• Informal feedback through personal

communication common • Business support used as a gauge of success

Recommendations and Conclusion

• Report ends with recommendations around the key sections

• Concludes with a consideration of industry best practice and how independent businesses in market towns may use Loyalty cards to remain competitive.

For more information...

Please contact:Hannah Bowden Business Development Manageramt-i, Action for Market Towns’ Research Consultancy

Tel: 07795 146913Email: Hannah.bowden@towns.org.uk