Card Power: The Core of a

Successful Loyalty Program

A White Paper by: Jet
September, 2013
Card Power: The Core of a Successful Loyalty Program

The question facing most brands is: How do You Increase

the Spend and Frequency from your Consumers? The
purpose of our research was to uncover data and best
practices around the use of cards within a loyalty program.
We found interesting information on how to increase sales
in a market where the the next big thing always seems to
be changing.

Keeping your brand present, and prevalent, in the minds

and buying behaviors of consumers is becoming more
challenging. Consumers are bombarded with marketing
messages, in multiple channels, and ensuring your message
is heard and acted upon is every marketers desire.

Jet, the leader in loyalty and gift card programs, is seeing

this trend become the new norm. Tony Haugen, Senior
Vice President remarks, We are hearing from many clients
how important it is for them to keep existing consumers
shopping, and bring them back to purchase more often. The value of having and executing a good loyalty
program has become more critical and in demand than we have ever seen before.

Loyalty Program Market Update

It is well documented that the average consumer is in as many as 14 loyalty programs, and 80% of
consumers state loyalty programs impact their purchasing decisions.1 There are many facets to obtaining
loyal consumers, yet there is no question that by retaining your existing consumer base, you can achieve
the biggest bang for the buck.

The finances of keeping consumers coming back is without question more lucrative than finding new
ones, as it can take as many as 5 new shoppers in a retail segment to account for the revenue of 1 existing
loyal shopper.2 A key focus to your loyalty strategy needs to be running a loyalty program that gives
incentives for consumers to return, and return often.

Certainly there is a cost to running a loyalty program; however the upside is great as well. Members in
programs tend to spend 30% -100% more than non-members, and are more frequent in their purchasing.3
Furthermore, you should see a real profit uptick as well; research shows that a 5% increase in customer
retention can result in a 25%-100% increase in company profits.4

In the marketplace, the conversation all seems to be about mobile, digital and social. Without a doubt,
technology is adding exciting channels to engage consumers, and their impact will play a factor in the
market, so it is definitely smart to incorporate these in your strategy. Saying that, here is the caution; the
topics are exciting and new and cool, yet that doesnt mean you will spend the majority of your budget in
mobile or digital loyalty solutions. On the contrary, a blended strategy and one that is back to the
basics might bring you the best results.

www.imaginejet.net A Whitepaper by Jet

Card Power: The Core of a Successful Loyalty Program

Give Them a Card

Cards have been around for decades and may seem like old news, but the market shows that cards are
cool, and they help power programs to success! Carrying a physical membership card gives consumers a
sense of belonging, that they are part of something special. This has been known for some time, yet
recent strategies seem to only want to run to mobile wallets and email blasts. Maybe it is time to
reconsider the power of giving consumers a branded welcome to the program.

This past year, one brand tested a card based program (one in which a card was given) compared to a
card-less (digital only) program to see if having a card in hand versus none offered had any impact on the
activity and excitement from the consumer. They found that the consumer participation rate was 8 times
greater in the card based program versus not offering a card at all.5 Even though there was a savings by
not producing a physical card; this was far outweighed by the participation and ultimately financial churn
of consumer activity.

Mail Really Does Work

Yes, with all the excitement of social marketing, emails, SEO, SEM, texting and so forth, direct mail is
still one of the best ways to engage consumers. In a recent channel preference study, the data supports
this claim, as 51% of U.S. consumers stated they pay more attention to postal mail than email, 73% prefer
direct mail for brand communications, and 73% receive emails they simply do not open.6

Research by Ball State University concluded that in some cases, 70% to 90% of respondents made a
purchase based on receiving direct mail.7 And when a card is in the direct mail piece, response rates are
even higher. Jet has seen this with several clients, as response rates have increased as much as 30% by
combining direct mail with email marketing campaigns.3

With this type of information, direct mail is a marketing channel that brands simply cannot ignore and
you need to ensure this is one part of your strategy moving forward.

Gift Cards as Incentive Rewards

Gift cards have become the number one gift in the US, and continue to provide tremendous revenue lift
for brands, and within loyalty programs a great (and successful) convergence is underway. The big idea
is to use gift cards as incentives within your loyalty program.

How impactful can a physical gift card be? It has been found that gift cards are 10 times, yes 10 times
more effective at driving incremental customer visits.8 A further look into why this is the case reveals
that consumers find a plastic gift card to be something of value. They place worth on a gift card and
therefore on a reward card that acts like a gift card.

A recent study shows that consumers who received a physical card as an incentive spent 43% more than
the card value, and 55% of those consumers redeemed their card within 30 days.9 Another survey
revealed that over 84% of consumers would rather receive a physical gift card than a virtual card.10 With

www.imaginejet.net A Whitepaper by Jet

Card Power: The Core of a Successful Loyalty Program

this type of data, marketers need to continue to focus their strategy on what the consumers want, and are
doing today.

In Conclusion

It is apparent that the use of physical cards still dominates the market today, and what is more, with
proper innovative techniques, their impact gives brands tremendous financial growth. The summary
message here is simple, dont forget to give them a card, they will love you for it!

I encourage you to act upon at least one of the options discussed here that will breathe some life into your
program this year! Start now by finding a partner that can help you engage consumers by leveraging
proven loyalty program card design and strategy techniques that WOW consumers, and ultimately have
them choose your brand, your card, your program each and every time.

Jet is a national leader in loyalty and gift card production and fulfillment solutions. Located outside of Chicago, IL,
Jet has 66 years of expertise and supports a national base of clients. You can learn more about Jet at
www.imaginejet.net , call 1.800.932.1.JET, or contact Randy Fox, Director of Marketing at
randy.fox@imaginejet.net.

Resources
1
Data provided by Maritz based on their market study, CRMC, June 2013.

2
CEB Tower Group press release, December 17, 2012.

3
Data provided by various brands to Jet in 2012 and 2013.

4
Reichheld, Fred, The Loyalty Effect , 1996.

5
Data provided by BJ Restaurant CRMC, June 2013.

6
Epsilons 2012 Channel Preference Study

7
Multi-Channel Merchant, 8 Reasons Why Direct Mail Still Works, Feb 1, 2010.

8
Taschetta, Jim, Q & A Ask the Experts, Loyalty Magazine, 4th Quarter, 2012.

9
Survey from Retail Touch Points and TSYS, 2011.

10
Survey from SVM, published comments in Loyalty 360 September 3, 2013.

www.imaginejet.net A Whitepaper by Jet