Why cafes offer loyalty cards?

smallsip

Hi,

I just don't understand why cafes (and many other businesses) never offer me a stamp themselves after my purchase. I always have to ask for it and it makes me feel like a tight ass. And if I don't ask for it, I feel like being ripped-off or missing out. The loyalty cards should make customers feel good, right?

My conclusion is that cafes just place the cards on the counter to look good but they don't want to use rewards to promote loyalty. It's not just independent stores, chains like Mad Mex, Pie Face or Mr Teppan do the the same thing.

So is it the case of they don't want to give out discounts or staff are not trained to promote their program? Please shed me some light here. To me having the loyalty cards on the counter collecting dust is just like having a TV in the room that you never turn on.

Ol_Grumpy

Boy, you could write a book or three answering this question... If staff is not doing what they should be doing that is a training issue. The bigger question is why management doesn't ensure procedures are being followed. Then there's bigger questions to be asked of owner's, etc. At my closest local Subway, the owner has several A4 sheets plastered around the shop of all these stupid petty conditions that have to be complied with if you dare to ask to use your loyalty card... And should you dare ask for your 'freebie'... He will make absolutely certain you have strictly met all his stupid conditions and will gleefully point out 'your' error if you happen to be non-compliant... I cannot for the life of me comprehend by what measure of sanity this fellow treats his paying customers with such contempt... He's a first class moron. When I was in there once before and he was complaining of not having enough customers I rather foolishly tried to point out the folly of his ways...and if you could have seen his face... The utter contempt, the complete disbelief... You would think I asked to de-flower his daughter.... I walked out and have never returned. Next.

mycuppa

Some cafe owners feel compelled to offer loyalty cards because of competitive reasons (everyone in the vicinity uses them) or because it's a strategy they feel will help grown their business, or it was something that has been in place a long time, possibly before they bought the business. Other cafes choose not to provide these systems. Generally, cafes in cities with office workers tend to provide loyalty cards because of the higher proportion of regular clients and it's what the saturated cafes in the general area are doing. Cafes in shopping centres or higher pass-through traffic, unless they are part of a chain/franchise, may be less inclined because they have a lower ratio of regulars and more transient customers. The majority of cafes who do in fact provide a loyalty offer will privately tell you they do not like it - for many reasons including abuse (people forging stamps), regular issues with consistency, customers who complain or beg for a discount, e.g. I've filled up 8 of the 10, so can I please have my freebie now ? etc. I have often found myself delivering coffee bags to a cafe, trying to place them under the counter and being caught in the middle of a customer and staff member having a "robust" discussion about redemption. Selling cups of coffee in cafes can be about the only thing profitable to keep some of these cafes surviving as an ongoing concern as most cafes owners tell me food is a complete nightmare and generally a money-loser when all costs are correctly calculated and assigned. To then have to discount your "crown jewel" further could be challenging or confronting for the cafe owners. Depending upon the market the cafe is working within, loyalty cards can do nothing or they can do something - I wish cafe owners would think more carefully about extending those types of offers as I'm sure many who do offer it could reliably survive without it.

Ol_Grumpy

I mostly agree with @Mycuppa, but wish to point out that whilst some customers loath loyalty cards, the 'majority' of CUSTOMERS love loyalty cards... It is a numbers game. In any commodity based market, coffee, or tradesman like me.... in any commodity based market... The very last thing you want to do is compete on 'price'. To win the battle for customer loyalty... you have to add value and also engage your clients, as if they are an audience. Done well, loyalty cards can be a very effective way to engage clients and add perceived value. Done poorly, however, and loyalty programs can become very distasteful, very quickly. They are nothing but one of many tools in the business owners tool-bag. One key in a piano keyboard full of keys.... Just because you build a cafe doesn't mean people will patronise that Cafe'.... Why should they? What are you offering that people want, that they can't get down the road??? It sure as eggs ain't a cup of coffee, is it? It seems like there are now coffee shops set up in the toilets of other coffee shops... In some places they are almost a disease.... Ever noticed how in a food court say that has several coffee outlets, how one particular shop is much better patronised than all the others.... It might not be 'something big'... It might not even be the 'best' coffee... Sometimes it's because they are getting all the little things right... Great attention to detail... People quickly forget the 'thing' they do.... But they remember for a long time how that 'thing' made them feel... If you really read the OP's original post... It's actually about how the experience made them feel, not so much about the experience itself.... If you get my drift....

RichardM

If I walk into a cafe that is a potential regular cafe that I plan on going to, that sells coffee for $4.50 per cup, and the one next door sells it for $5 per cup, but gives every tenth one free, I instantly do the math and figure that 10 coffees is $45 at both places. If there is a loyalty program, I expect it to be honoured, but I'd rather them not have it, and just be a little more reasonable in price (some places here are getting up to $5.30 for a Regular Cappuccino, others are $3.80). Ignoring the coffee aspect, loyalty programs and gimmicky promos tick me off royally. I walked into a sportswear store the other day at 1pm, wanted to buy a pair of shoes after hearing an ad on the radio having $50 off. "Sorry, that was only till midday". Bought online for $120 instead of the $180 they had them for. Just give people a decent price, all the time, no gimmicks, and people WILL buy off you. Then there are the "loyalty-programs-that-aren't-loyalty-programs" (the ones where they say you get "points" for buying things, but never know what they mean (the one offered by former Jag/Colorado group springs to mind. Their loyalty card was really just a way to do their market research and spam you after every purchase). I assume that marketing companies are all over these things, claiming they improve performance of sales etc, but if you have 100 loyalty cards in your wallet, does it really change your buying habits?

mycuppa

Exactly RM - most programs are not worth the effort or are offered with a hidden or double agenda. We often get people who hit us up for additional discounts because they purchase regularly (well, they think they might be big spenders). I then have to explain we are already operating at more competitive pricing than our peers, constantly bench-marked - thus, I leave it up to them if they can work out whether they have enjoyed any benefits/value, perceived or otherwise.

smallsip

I personally have a MyerOne card so I often buy from Myer instead of independent stores offering the same brands. The marketing team @ Myer knows that we tend to spend more than the value of the gift voucher. That's is okay, I make sure I don't buy things I don't need. Ol Grumpy and MyCuppa should offer marketing/loyalty courses to business owners. Many of them know food & coffee but not much about the marketing side. If they truly want to build a strong & loyal customer base, they should: - remind and offer points/stamp after each transaction (like how Woolies, Coles & Myer do) - make sure people can redeem and feel rewarded (by moving from cards to mobile apps) - agree with Richard M - who want cards? - perhaps offer more than just a FREE regular coffee and more ways for us to earn points - like a point based system with many different rewards. The discount doesn't have to be 10% off, it can be less as long as I want it, can earn it and the overall value (from food + experience + price) is still there.