Today, nearly every form of business that was once done on paper is being partially or fully transitioned into a digital format. Loyalty cards and punch cards are no exception. If you are looking for a way to transform your existing loyalty program or launch a new one, this guide details the history, benefits, drawbacks, and other important considerations of the mobile punch card.

What Is a Punch Card App or Mobile Punch Card?

These two terms refer to a virtual loyalty system. A digital punch card is one that customers can access on their mobile devices. Most companies that offer these reward programs connect them to a free mobile app. Other companies have online, web-based programs that require people to sign in and add rewards.

Some businesses offer both options. For example, one major grocery chain in the United States offers a mobile app and an online platform for customers to choose digital coupons to add to their cards, and they can use those coupons when they make in-store purchases by entering their phone numbers. They earn rewards for the money that they spend as well. If you remember the days of paper punch cards or loyalty cards, a digital punch card is a similar concept with a technological twist. There are also more potential benefits with a punch card app, which we’ll discuss further.

History of Punch Cards and Loyalty Programs

The concept of punch cards dates back to the 1700s. However, the first notable use of a punch card was for tabulating vital statistics for the New York City Board of Health. At that time, punch cards were not commonly used for loyalty programs. Some merchants issued tokens to customers that they could redeem for future purchases.

As settlements and commerce grew across the United States, merchants saw the need to find ways to gain loyal customers. As customer bases grew, tokens became too expensive for many merchants to continue using. Green Shield stamps were often used for loyalty programs. Merchants would issue a certain number of stamps to customers, and they could use them to redeem for items in a catalog. This evolved into individual retailers offering their own programs.

Competition grew even more after the 1950s, and smaller retailers started their own in-store loyalty programs. They often used punch cards, stamp cards or stickers to reward loyal shoppers. As paper punches became easier for people to buy, there were customer dishonesty issues. Merchants found ways to limit dishonesty with customized punchers, stamps or stickers. Many businesses switched to plastic cards in the 1990s. By the late 1990s, some companies offered plastic cards with magnetic strips or scannable barcodes.

In the early 2000s, many businesses started using miniature keychain cards. Since people often lost or forgot their cards, bigger retailers started connecting them to phone numbers. Instead of presenting a card, a customer could provide a phone number to receive a discount or add rewards. Some offered online loyalty programs that were accessible through a website. The next decade brought a rise in mobile apps and scannable barcodes on apps. Today, the mobile punch card is the loyalty program pinnacle of excellence for simplicity, benefits and customization. Customers do not need to carry cards or provide a phone number. However, some top mobile apps are still connected to phone numbers for added security and convenience.

Benefits of a Digital Punch Card Loyalty Program

If you have been using a non-digital loyalty card system, there are several advantages of switching to a digital platform. First, a digital format helps you cut down on paper use, which your customers can appreciate. Most people are concerned about the environment today, and they pay attention to what businesses do to limit their environmental impact. What’s more, physical punch cards are often lost or misplaced, making for a less than ideal customer experience.

Since digital loyalty card programs often include special tools for tracking and sorting data, you also have the benefit of gleaning valuable insights from your customers’ visit and spending behaviors. You can verify purchase trends to help guide your inventory choices or modify your services. You can see what times customers use the program most. Also, if you vary your discounts or promotions, you can see which ones have the strongest responses. Both younger and older generations are using mobile phones and apps today more than ever, and having an easy way to reach them is critical. With a mobile platform or app, there are benefits for you and the end user. Also, you have both tools and data to help you develop a strategy to most effectively reach your target market or markets.

Cons of Mobile Punch Card Apps

The main potential disadvantage of using a mobile platform is cost. For example, if you used to purchase simple punch cards, an app with premium features will certainly cost a premium. However, if you use leverage both the tools and data that the app provides to optimize your marketing strategies and customer experiences, it can be a fruitful long-term investment.

Another risk to consider is security and the sharing of customer information. Most digital rewards programs will require a customer to provide their information (email or phone number) in order to sign up and earn rewards. While the vast majority of customers are comfortable providing their information, others might be hesistant, worried that they’ll be contacted invasively, or worse, that their personal details will be shared without consent. It’s important to know how your loyalty provider plans on storing and potentially trading your customers’ data.

3 Important Features to Have in a Digital Loyalty Card System

If you are ready to start your first loyalty card system or switch from a simpler system to a punch card app, these are the top three benefits to look for.

1. High User Adoption

User adoption is the extent to which users accept and utilize a program to fill a need. For example, a mobile platform for a loyalty program gives them an easier way to accumulate and use rewards than a standard system. Since they want to see reasons to use the app, it is essential for you to choose one with features that foster higher user adoption. Programs that are based on phone numbers boost user adoption. As you compare apps and their features, think from the perspective of your target market and what they would find most attractive and useful.

2. Customizable Rewards

One of the downfalls of older systems is that customers are often rewarded on a per-visit basis. This unfair setup can lead to disinterest among your biggest spenders, and you do not want to lose them to a competitor. With digital programs, you can easily reward customers for the amount that they spend instead. For example, you can issue a point for every dollar spent instead of a few points per visit. When a customer accumulates a certain amount of points on a mobile punch card, that person can redeem them for a discount or a reward. Another plus is giving customers more than one choice on how they can use their points.

3. Marketing Suite

In addition to having benefits for your customers, the loyalty card system should have plenty of powerful marketing tools to allow you to engage with your customers. As noted in earlier sections, the data that apps generate can be like gold for marketing strategy development. If you want to compete with the biggest corporate names that have dominating market shares, you need a program with several automation tools to help you make the most of that valuable data. Although some programs have a comprehensive suite of marketing tools, these are a few examples of important tools to look for:

• Segmentation allows you to sort participants into groups, and you can send exclusive or custom offers to those groups.
• Tagging allows you to send customized suggestions or create customized experiences for people based on their gender, age, preferences and other factors.
• Messaging tools allow you to easily reach the right customer with the right message or offer on the right device at the right time, especially when they haven’t visited your store recently.

Is a Mobile Punch Card Program Right for You?

If you are ready to boost your customer base, using a punch card app correctly can help you achieve your growth goals. You can also retain your valued customers and give them one thing that is increasingly important to consumers today, which is a personalized shopping experience.