Punch Cards vs. Digital: 7 Reasons Merchants Should Invest in Digital Customer Loyalty

If you’ve ever had a punch card for a local restaurant or customer rewards program, raise your hand. Traditional punch cards have been a valuable marketing tool for merchants for years. However, the time has come for merchants to embrace the shift towards digital loyalty programs. These digital loyalty programs offer many advantages and new opportunities for merchants to engage customers and increase loyalty.

At textLIVING, we’ve seen how the shift to digital customer loyalty programs has helped merchants enhance the customer experience and increase brand value. After supporting over 10,000 merchants with our proven customer loyalty and text marketing software, we’re confident in our platform and passionate about equipping our white-label partners with insights they can use to help merchants recognize the power of digital loyalty programs. 

7 Reasons Merchants Should Invest in Digital Customer Loyalty 

Here are seven compelling reasons that merchants should make the switch from traditional punch cards to digital loyalty programs:

1. Digital loyalty programs aren’t prone to counterfeiting, unauthorized punches, or theft. 

Physical punch cards have several inherent vulnerabilities that make them susceptible to fraud and abuse. For example, Subway famously had to shut down their Sub Club punch card program due to fraud issues after fraudsters began manufacturing counterfeit completed punch cards and selling them via online auction sites.

Physical punch cards leave merchants open to other vulnerabilities, including unauthorized employee punches or sharing cards. Physical punch cards can also be lost, stolen, or accidentally damaged. When this happens, the customer and the business lose track of the loyalty progress, leading to potential disputes and dissatisfaction.

Thankfully, technology allows us to take the simplicity of a punch card program and eliminate the fraud opportunities with a digital loyalty program. Merchants who use the textLIVING platform send offers tied to a customer’s cell phone number, which cannot be shared with others, obtained fraudulently, or redeemed at another place of business.

2. Digital loyalty programs offer customer insights and actionable data. 

In today’s data-driven landscape, relying on physical punch cards can leave businesses in the dark. Physical punch cards offer no insights into customer behavior, leaving merchants with a pile of completed cards as their only indicator of customer engagement. 

However, digital loyalty programs provide real-time access to vital performance data. With the textLIVING platform, merchants can track metrics like program membership, customer visits, offer redemptions, and daily participation averages. This helps restaurants and retailers stay connected with customers and makes it more manageable to evaluate their loyalty program. 

3. Digital loyalty programs are more convenient for customers. 

Traditional ​​punch cards demand that customers carry them around at all times. If customers are enrolled in multiple loyalty programs across different locations, they could end up with a George Costanza-sized wallet—not a pleasant experience. Physical punch cards also create challenges for merchants and customers if they leave the card at home or forget to request a punch. 

Digital loyalty programs like textLIVING’s customer loyalty software simplify the process. Customers can quickly sign up, check in, and claim rewards using a touchscreen kiosk conveniently located at the front of the store or restaurant. 

4. Digital loyalty programs help merchants identify and engage non-loyal customers.

Traditional punch card systems can’t tell merchants when a customer last visited or identify lapsed customers. Digital loyalty programs allow merchants to pinpoint these customers accurately and share compelling offers that entice them to visit again. 

Our textLIVING software allows merchants to send numerous automated text marketing campaigns to customers who have not checked in during a predetermined time frame. We’ve seen how digital loyalty programs help merchants create a sense of urgency to re-engage customers who haven’t visited recently.

5. Digital loyalty programs allow for more personalized and interactive engagement with customers. 

Today’s consumers want personalized communication from merchants. In fact, a recent study from McKinsey & Company found that 76% of consumers said receiving personalized communications was a critical factor in prompting their consideration of a brand. This is one of the primary reasons every business needs text marketing in their customer loyalty program

Simply put, digital loyalty programs allow merchants to proactively engage customers in ways that traditional punch cards cannot. The textLIVING platform offers multiple opportunities for merchants to proactively communicate with customers—from sending animated GIFs with special offers to sharing trackable URLs and encouraging new customers to connect with the business on social media. 

6. Digital loyalty programs equip merchants with flexibility, customization, and opportunities to create instant gratification.

Traditional punch card systems require printing and distributing physical cards, which can waste money if the program isn’t enticing. In contrast, retailers and restaurants can easily modify their digital loyalty programs to adapt to changing customer preferences and market trends.

Digital programs also allow merchants to tailor rewards and incentives to specific customer segments. For example, merchants can use digital loyalty programs to provide instant rewards or discounts to customers when they reach a certain loyalty threshold. These “surprise and delight” experiences are highly effective for enhancing customer loyalty. 

7. Digital customer loyalty programs offer a competitive advantage that scales.

Physical punch cards have played a valuable role in helping merchants engage customers for years, but times are changing. As more businesses embrace digital loyalty and marketing programs, those still relying on traditional methods may need updating. Adopting modern technology can give businesses a competitive edge.

Investing in a digital customer loyalty program also enables merchants to build a program that is easily scaled as their business grows. Digital loyalty programs can accommodate a more extensive customer base with more complex loyalty structures and can be expanded to additional locations. Digital loyalty is a cost-effective solution that offers benefits that traditional punch cards can’t.  

Explore textLIVING’s Digital Customer Loyalty Platform

If you’re passionate about helping merchants increase customer loyalty and earning monthly recurring revenue from software sales, you might be interested in white-labeling our proven software. At textLIVING, there’s nothing we love more than seeing our white-label partners embracing the potential of our platform and helping merchants grow their businesses.

Learn more about our proven customer loyalty and text marketing software, or explore our white-label partnership opportunities today. 

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