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Forget punch cards and say hello to referral cards

Forget punch cards and say hello to referral cards

Every time I visit a restaurant in a mall food court I eyeball those irresistible punch cards smiling at me from the counter. You know, those little cards that inevitably clutter your wallet to the point where sitting down strains your back.

At one time I probably had 10 different cards, each of them with a single over-inked stamp or moon-shaped punch hole. “Here you go, you’re only 14 stamps away from a free small cheeseburger!” That is if I ate cheeseburgers.

The next time I ever saw them was when I would survey the damage after leaving my wallet in my jeans on laundry day. In retrospect, they weren’t really that effective – at least in bringing me back to buy more.

Because let’s be honest – loyalty programs are created to, well, promote loyalty. Repeat customers. More revenue. But for many companies, the punch card rarely finds its way back.

Yes, there are exceptions. Some people do use a loyalty card at their favorite locations. But studies show that there is little correlation between repeat customers and the implementation of loyalty cards.

People return because they like the product or service, and if they have a loyalty card they will use it – why not? Too often the loyalty card does little more than cannibalize sales.

My point? If your goal is to bring in repeat business your loyalty program needs to have real value. Enough value that it will inspire a customer to shop with you over a competitor.

If you are using loyalty cards as a way to track customer behavior and tailor marketing – that’s a different story. But for the average company, there is a much better option, referral cards.

Whereas the focus of loyalty programs is on promoting repeat business; referral cards leverage existing customers to bring new blood in the door.

I am sure you have seen businesses hand out cards that promote an incentive-based referral program. On the card is nothing more than “refer a friend, get 10 bucks” or something of that nature. That is not a referral card.

I am talking about something that a business provides its customers that they can give to their friends and family that has exclusive value to the recipient.

For example, two golf lessons at a country club valid only for Bob’s friends and family. In order for the card to have value, it must be an exclusive offer that is not promoted elsewhere.

The only way for a new client to get this specific deal is via an existing client.

This way your client will feel they are giving something of actual value to their friend when they are referring you. If it is a coupon that you can find in the Sunday paper its value vanishes (and is embarrassing to give away).

You may also consider pairing the exclusive offer with an incentive for your client. For example, a card that will reward both the existing client and the new guy. This way your clients will have more of a reason to hand them out, and the prospects will feel more obligated to use them.

By empowering your loyal customers to bring in their friends and family you are also facilitating conversations that strengthen your brand. Referral cards will get people giving the gift of your business, as long as you make it worth their while to do so.

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