I go out to work in the morning, check my wallet: money, passport, pass, discount cards... Stop. Why these, I’m not going anywhere except work? But the hand does not rise to lay them out. Marketers are people too, and knowledge of the laws of marketing does not exempt you from their influence on your own head.
I have never used some cards in six months, but I still carry them with me. This small rectangle, like a diplomatic passport, gives confidence and subconsciously “increases status,” even if you really don’t want to admit it to others or to yourself.
This circumstance, along with a purely rational approach, is what forces consumers all over the world to join the multi-million army of discount card holders. In fact, isn’t it nice to feel like a “special”, “exclusive” buyer, and in addition to this pleasure, also save?
This is from the buyer's point of view. But what makes gentlemen entrepreneurs resort to discount systems again and again? Based on common sense and experience in marketing, I can assume that there is certainly no special unselfish love for your clients.
The notorious West has long and successfully used the discount card tool for accurate marketing research of its existing and potential customers, and then for the development of segmented targeted marketing programs.
In addition, in our country there is still no established classification of discount systems and, accordingly, terminology associated with this classification, as well as operating standards based on this for participants in the discount card market. Obviously, the practice of using discount cards in Russia is so extensive that it already requires certain “rules of the game on this field.”
First, let's go over the basic terms and concepts surrounding these plastic or cardboard pieces. The card itself is worth nothing; it gains value as a result of being the visible part of the iceberg called the “discount program”. This program or scheme is a rule (a set of rules, conditions, algorithm, etc.) according to which a buyer in a trade and service organization is given a discount or other benefit. A discount program, by and large, does not necessarily have to be a card program. Widespread coupon schemes in America can also be classified as discount schemes. But a discount card always works within the framework of a certain discount program.
The discount system logo is a trademark, service mark, or any other information element of the card that allows you to visually clearly identify which discount system this card belongs to. The logo indicates to the consumer the possibility of receiving discounts or other benefits upon presentation of a discount card with this logo.
Discount card holder is a person who legally owns a discount card, and therefore has the right to receive discounts or other benefits.
Issuer of discount cards is an organization that has issued discount cards and has undertaken to ensure their acceptance and provision of discounts (other benefits) in companies included in the discount system.
The discount system is a set of legal relations between holders and issuers of discount cards, as well as trade and service organizations that accept discount cards. A discount system can be created by a single trade and service organization, which is thus both an issuer of discount cards and an organization that accepts them when a consumer pays for goods, services or work. In the consumer market, the discount system is identified by its logo by holders of discount cards.
Participants of the discount system are holders and issuers of discount cards, as well as trade and service organizations that accept discount cards with the logo of this discount system.
A joint discount card is a discount card bearing two or more logos of discount systems and/or trade and service organizations, each of which separately determines the discount properties of the card. Holders of rights to use logos are called co-issuers; one of them is the main issuer, the others are sub-issuers.
An association of discount systems is a collection of various discount systems that voluntarily joined the association on a contractual basis and adopted uniform operating standards as participants in this association.
Discount systems are divided into simple and complex. In simple programs, a discount or other benefit for a client does not depend on his purchasing activity, but may depend on the amount of his one-time purchase. In the latter case, we are dealing with a simple scaled system.
Complex discount systems, in turn, are divided into savings programs (or loyalty programs) and settlement (or trade) discount programs. In loyalty programs, the discount depends on the volume of consumer purchases in a given trade or service organization. Purchase records can be kept for a specific range of goods or services, or for the entire range of goods or services provided by a given company.
According to the systems used, discount cards are also divided into simple discount cards and cards with complex discounts, which in turn are divided into loyalty cards and payment (borrowed, prepaid, credit) discount cards.
As in the case of simple discount programs, in complex discount systems, a discount scale depending on the size of a one-time purchase can be used as an additional condition for the consumer.
That’s it, we’ve broken through the jungle of terms, now we can continue talking “in terms”.
Now almost everyone has rushed to introduce discount cards, but often these same cards are issued first, and only then they think about why. Nine out of 10 stores, after the issue, come to the conclusion that they need a discount card to increase customer loyalty, but customers can be retained in other ways, and discount cards in this sense only work if they are woven into the overall system of maintaining loyalty.
The option of selling cards as part of a loyalty program looks especially strange. You cannot make money from the consumer and count on his loyalty. Russians are ready to buy discount cards if their cost does not exceed 10% of the average bill. Considering that the average bill in most Samara supermarkets fluctuates around 300 rubles, calculate for yourself how much a discount card should cost.
The main advantage of a plastic card abroad is the ability to create a database of regular customers with its help. At the time the card is issued, the buyer must fill out a form. In this way, the company collects data on the age, social status, place of residence, and family of the consumer. The information is entered into the database, then all purchases of the cardholder are automatically taken into account.
According to experts, information obtained from the database helps trading companies work in three directions.
Management of assortment, prices, sales, etc. For example, you can track which products are not in demand among cardholders in order to remove them from the assortment. Purchase history allows you to select products for special offers, such as “two shampoos for the price of one,” and also predict demand for certain groups of products.
Impact on the buyer. Cards can force a visitor to make an unplanned purchase, for example, in addition to sausage, they can also buy a saucepan. There are many ways to manipulate the buyer, for example, a system of accumulative points in exchange for some product. At the same time, thanks to the database, the store can build closer relationships with customers, offering them additional services or simply sending New Year cards.
Improving the efficiency of working with suppliers. In developed countries, it is a common practice for a chain of stores to open up their database to their suppliers, although in our country this is still very difficult to imagine. Thus, the network shifts to partners the creation of a delivery schedule, assortment compilation and other headaches of the same kind.
So, in addition to “binding” the consumer, a discount card allows the company to solve several important problems, such as: attracting new customers, increasing sales, conducting marketing research, increasing the company’s image in the eyes of customers and competitors, creating additional advertising space, etc. and so on. The scope of application of discount cards is limited only by the imagination of the marketer introducing them, on the one hand, and the caution of the director, on the other.
According to the Magram MR study, our compatriots find cumulative discount cards most attractive, where all purchases are summed up and after a certain amount the discount amount increases. A similar example in Samara is the cards of the Implosion pharmacy chain, which, however, never bother to change from cardboard to plastic.
Have you already decided to order the first edition of your own discount cards tomorrow? Maybe you shouldn’t rush, since the card is still a document and, before putting it into circulation, you need to carefully weigh everything.
Usually, when they act wisely, the company first develops a special program for its implementation. It takes into account all the details: card design, circulation, distribution procedure, size of discounts, scale of influence, form of distribution, card expiration date, interaction with existing elements of the advertising campaign, control over the provision of discounts, equipping with special equipment for reading information.
The last two points will be determined by the choice of map type. Today there are three of them: a regular plastic (cardboard) card; magnetic card; smart card.
A regular plastic card is the simplest type of discount card. When making a purchase, the plastic card is presented to the cashier, who provides a discount. A regular card does not allow you to keep records of purchases and discounts provided, as well as control the cashier who accepts the discount card.
A magnetic discount card involves installing a computer (or a computer cash register) with a magnetic card reader. When making a purchase, the cashier inserts a magnetic card into a card reader connected to a computer. The discount amount is determined automatically, depending on the card category and purchase amount.
A magnetic card allows you to provide discounts on purchases; keep records of discounts and purchases for any period of time; change the discount amount depending on the total amount of purchases over the past period of time; automate the processing of information about discounts, cashiers’ work, etc.; using card data, analyze demand (conduct marketing research)
If a discount magnetic card is issued by a chain of stores, then information about purchases and discounts must be periodically (once a day) transferred to the central office of the trading company. This is done in the interests of the buyer, so that when he comes to any store, he receives the real amount of the discount achieved as a result of all his previous purchases.
A discount card in the form of a smart card is the most modern solution (and the most expensive) that allows you to provide for all the nuances that arise during the customer service process. A smart card performs the same functions as a magnetic card, but has a number of advantages.
Smart cards easily allow you to add additional functions, client and other programs in the future and thus develop the system at the request of the customer.
Manufacturing costs directly depend on the type of cards chosen and the design bells and whistles on their surface. A smart card will cost more than a small piece of plastic without electronic “load”. As for design, the most impressive from a financial point of view is printing a full-color photograph, or decorating a card with gold and embossing. A very cheap option - printing cardboard discount cards, some of them were even numbered by hand, is gradually becoming a thing of the past.
The cost of cards also depends on the circulation, color, embossing (relief display of letters or numbers), finishing, personalization, etc. This service is provided by many companies even in Samara, not to mention Moscow. The average circulation is 300-500 pieces.
To reduce the cost of card production, sometimes several companies merge and create a single discount system.
Discount cards are also distributed in different ways.
Some stores, for example, thus reward a customer who has made an expensive purchase, or several purchases for a certain, usually very impressive, amount. This approach is quite popular and, in principle, quite effective. Firstly, the store “endears” the buyer by showing him a special sign of attention, expressing gratitude for his cooperation. Secondly, the number of discount card owners in this situation does not depend on the popularity of the project, but is determined only by the conditions (purchase amount) chosen by the store itself.
Another very common Russian option is when a discount card is offered to the buyer for a fee. The popularity of such cards is somewhat lower than in the first case. However, if the consumer nevertheless decides to purchase it, he is almost guaranteed to become a regular customer of the store (restaurant, airline, etc.).
The third option is when the card is distributed for a fee, but is at the same time an independent product. We are talking about extensive discount systems, when the card essentially does not belong to a specific store, retail chain or restaurant. In this case, the production and distribution of the card is carried out by a separate company, for which the discount card is an object of its own business. Such cards (universal), as a rule, are more expensive than those sold in stores, but the network of trade and service organizations included in the discount structure is very wide. By purchasing one card, the consumer gains the opportunity to enjoy discounts in several dozen companies, including, possibly, abroad. It’s difficult to call this type of card discount; in essence, they are already closer to club cards, which denote, first of all, belonging to a certain community of privileged individuals.
A separate headache for managers of enterprises introducing a discount system is the amount of discounts. There are no general recommendations here and cannot be, since the question is purely individual.
But still, there are several systems for providing discounts using a discount card that are common on the market today.
The classics teach that there is client loyalty to the discount program as such, but not to the company conducting it.
Most likely, with the introduction of a discount system, the purchasing power of customers will not change. The question is whether they will take the money they save with them or spend it in the same place where they received the discount, and with some premium. Before assigning the amount of a discount on a discount card by a strong-willed order from the general director, it would be nice to estimate the amount and structure of the costs of the average client for 1 visit to this establishment. Then estimate what percentage of the profit the owner can give up and divide it by the number of expected discount card holders (regular customers) per month.
In general, a discount makes sense when the amount saved plus an additional percentage (the longer the period of consumption of the product, the higher it is) can motivate a repeat or additional purchase. But for most enterprises, in any case, giving more than a 10% real discount does not make sense, since you can easily become unprofitable. With an overwhelming number of regular customers, it is easy to reduce profitability by foolishly introducing a discount. Ideally, model and play with numbers using the “What if...” principle.
The amount of the discount also depends on the purpose of introducing the discount system.
The simplest thing is to follow industry logic and maintain market position. In this case, the choice is small. If the stores are typical and do not differ much from competitors, then you have to react quickly and often - it seems. More often than not, there is little point in reinventing the wheel - the positions are more or less balanced. This, of course, is similar to a price war, in which, given equal starting conditions, everyone can lose. But that's life.
If the goal is a rapid increase in demand, then it requires a simple calculation. Obviously, if we operate with such an indicator as income per visitor, it is unlikely that a discount card will lead to a strong increase in the indicator; rather, it is a path to stabilization. Price for many consumers is an important component in the sense that there are certain price limits that a person tries to fit within, although this is not always the case. If you are interested in gross indicators and there is confidence in demand growth, then you can try to estimate how much the number of visitors will increase. You can test your assumptions either with the help of a special study, or experimentally, by introducing temporary cards (or temporary discounts) and seeing what comes of it.
Another question is the market capacity. Which clients will we fight for - new ones or have all of them already been taken over by competitors? Positioning will greatly depend on this. And if new customers can be lured to discounts, then with a sophisticated consumer we need to work on his loyalty.
Here it should be said that discount cards are not the only, and perhaps no longer the key element in the formation of loyalty. There are a lot of parameters that make up the customer’s attitude towards the store. This can be revealed through a simple survey. It is quite possible that the opportunity to pay less is not a value at all in the eyes of consumers, so why bother? It is better to ensure that the staff is well-trained and does not allow any failures.
But loyalty can also be “forced”. This happens when a reward is expected at the end of a certain period, that is, for example, a free dinner after a certain number of accumulated points (visits, etc.). Airlines use this method of incentives - the client does not receive a reward immediately, but by “proving” his loyalty. The disadvantage of this scheme is the fact that a client who strictly considers his benefits may come to the conclusion that he will receive greater benefits by visiting another, cheaper place.
To prevent this, an additional set of measures or simply a separate loyalty building program is needed. If it is important to attract an “expensive” buyer, then it is much preferable to create different levels of service, where the main value in the card is not the discount (although it is possible), but the level of privileges received.
The most important thing is to find distinctive benefits and present them to customers, ranking their access to these benefits according to their contribution. It is very important not to offend the new buyer, but to interest him in receiving a preference.
Many companies, instead of a single card, offer their clients several card options, each of which has a number of differences. For example, there is a very popular system of dividing cards into “silver”, “gold”, “platinum”, “diamond”, etc.
The first in this case costs much less than the second, third and fourth (with free distribution it is issued for the purchase of a less expensive product / service), but the amount of discounts that its owner can count on is lower than that of more privileged cards.
The discount itself can be absolutely fixed, partially fixed or “free”.
In the first case, the owner in any situation can count on the amount of the discount declared on the card. Regardless of the type of product purchased and the purchase amount, he consistently saves, for example, 10% of the total cost.
The option with a partially fixed discount provides for a change in its value depending on the type of product or purchase amount. For example, for one product the discount rate can be set at 5%, for another 10%, for a third 15%. If we are talking about the amount, then suppose that when purchasing a product for 200 rubles, there is a 0.5% discount, for 1000 rubles - already 5%, etc.
As for the “free” discount, in practice it looks like this: the store unilaterally changes the amount of discounts each time, guided by its own considerations about sales efficiency. The amount of the discount in this case may be affected by changes in demand, the appearance of a new product, upcoming holidays, etc.
At the same time, the principle of providing a discount can also be different, for example, a specific discount amount is established for a specific product, or a cumulative system operates (with each new purchase the percentage of the total discount increases), or the discount begins to operate only after exceeding a certain purchase amount.
A fixed discount is most often associated with impersonal discount cards, and a “free” discount is associated with personalized ones. Given the existence of a conventional discount system, there are no incentives to acquire a personal card; most often this is why unjustified attempts to convert an impersonal system into a personal one fail. Personalized cards are successfully used where “personal”, “trust” relationships exist: payment systems, closed clubs, etc., when it is simply unprofitable to transfer your card to another.
For impersonal cards, the more they circulate, the better, although business managers are often afraid of this, since it is impossible to create a customer database using impersonal cards. But this is just a common misconception. Firstly, you can create a database of those to whom these cards were originally issued and build communications with them. There is nothing terrible here, but it is necessary to take into account the fact that the card is mobile in direct mailings, based on the consideration that the card still leaves its owner for a short time and tends to return to him, and additional advertising addressed to the same person can serve as the basis for a positive recommendation to a friend, given along with the card.
Secondly, write down the coordinates of the people who came with the card, while coming up with a plausible answer to the question: “Why do you need my last name and phone number?” From personal experience, I can say that in most cases a simple thing works: “our program requires it,” although you can frankly admit that you are writing it down in order to notify about winning a card in the store’s next lottery. You can, for example, enter the buyer's demographic information and the card number he presented into warranty cards. Then it becomes possible to find the most popular card and offer a big discount or some additional bonus on it.
It is not necessary to issue discount cards to everyone; you can highlight your promising category of clients and issue cards only to them. Moreover, it is possible to distinguish not only by standard geographical or age characteristics, but by psychological, behavior, for example, or by consumption situation.
In general, discount cards as a way to attract customers, of course, work, but not for very long, alas. It is more effective to develop them as a basis for a loyalty program, but there are pitfalls here, especially when working with a highly profitable audience.
In addition to discount cards, bonus cards have also recently become widespread. If discount cards imply discounts on the entire assortment of the store or on some of its items, then bonus cards make it possible to accumulate reward points, for a certain amount of which you can receive a gift. For example, in all restaurants of the Moscow Rostik Group, reward points are awarded to the client’s card - 10% of the order amount. These bonuses can be used to pay for orders at any of the chain’s establishments.
Bonus cards are considered more effective than discount cards for use in customer loyalty programs, especially when it comes to representatives of the middle class and above. As income grows, the discount ceases to act as a decisive factor when choosing a seller of goods/services and in itself is of no interest to the buyer. The concept of a discount in advance implies "today". You gave it, the client used it and left. It is important for wealthy visitors to feel part of a select society and confirm their status. Some of them may be offended by a discount, especially a small one. They want more than just a discount, which is why bonus programs for this category are considered more effective. Even more effective for this group of the population are club programs in which the image component almost completely covers the economic benefit, and such programs have already begun to actively develop in Russia and are taking their first steps on Samara soil, but this is a completely different story...
The main thing that should not be forgotten when introducing any type of cards is that the main emphasis will still have to be placed on the assortment, service and additional services. The card is a symbol of all of the above, and the discount on it is a nice addition.
(c) https://card-online.ru/articles
I have never used some cards in six months, but I still carry them with me. This small rectangle, like a diplomatic passport, gives confidence and subconsciously “increases status,” even if you really don’t want to admit it to others or to yourself.
This circumstance, along with a purely rational approach, is what forces consumers all over the world to join the multi-million army of discount card holders. In fact, isn’t it nice to feel like a “special”, “exclusive” buyer, and in addition to this pleasure, also save?
This is from the buyer's point of view. But what makes gentlemen entrepreneurs resort to discount systems again and again? Based on common sense and experience in marketing, I can assume that there is certainly no special unselfish love for your clients.
The notorious West has long and successfully used the discount card tool for accurate marketing research of its existing and potential customers, and then for the development of segmented targeted marketing programs.
Russia, as always, has its own special path of development.
Let's start small. If you want a Samara-Product card, go and buy it. Never in Western literature has a practical case of selling discount (namely discount) cards been described. With the help of a small blitz survey of acquaintances living in the local area and fellow marketers working with foreign partners, it was possible to establish that they had never heard of cases of sales of discount cards abroad of the former Soviet Union. Here's the first feature.In addition, in our country there is still no established classification of discount systems and, accordingly, terminology associated with this classification, as well as operating standards based on this for participants in the discount card market. Obviously, the practice of using discount cards in Russia is so extensive that it already requires certain “rules of the game on this field.”
First, let's go over the basic terms and concepts surrounding these plastic or cardboard pieces. The card itself is worth nothing; it gains value as a result of being the visible part of the iceberg called the “discount program”. This program or scheme is a rule (a set of rules, conditions, algorithm, etc.) according to which a buyer in a trade and service organization is given a discount or other benefit. A discount program, by and large, does not necessarily have to be a card program. Widespread coupon schemes in America can also be classified as discount schemes. But a discount card always works within the framework of a certain discount program.
Some other necessary terms for playing discount cards:
A discount card is nothing more than an identification document (with details and logo of the discount system) certifying the right of its holder to receive discounts or other benefits.The discount system logo is a trademark, service mark, or any other information element of the card that allows you to visually clearly identify which discount system this card belongs to. The logo indicates to the consumer the possibility of receiving discounts or other benefits upon presentation of a discount card with this logo.
Discount card holder is a person who legally owns a discount card, and therefore has the right to receive discounts or other benefits.
Issuer of discount cards is an organization that has issued discount cards and has undertaken to ensure their acceptance and provision of discounts (other benefits) in companies included in the discount system.
The discount system is a set of legal relations between holders and issuers of discount cards, as well as trade and service organizations that accept discount cards. A discount system can be created by a single trade and service organization, which is thus both an issuer of discount cards and an organization that accepts them when a consumer pays for goods, services or work. In the consumer market, the discount system is identified by its logo by holders of discount cards.
Participants of the discount system are holders and issuers of discount cards, as well as trade and service organizations that accept discount cards with the logo of this discount system.
A joint discount card is a discount card bearing two or more logos of discount systems and/or trade and service organizations, each of which separately determines the discount properties of the card. Holders of rights to use logos are called co-issuers; one of them is the main issuer, the others are sub-issuers.
An association of discount systems is a collection of various discount systems that voluntarily joined the association on a contractual basis and adopted uniform operating standards as participants in this association.
Discount systems are divided into simple and complex. In simple programs, a discount or other benefit for a client does not depend on his purchasing activity, but may depend on the amount of his one-time purchase. In the latter case, we are dealing with a simple scaled system.
Complex discount systems, in turn, are divided into savings programs (or loyalty programs) and settlement (or trade) discount programs. In loyalty programs, the discount depends on the volume of consumer purchases in a given trade or service organization. Purchase records can be kept for a specific range of goods or services, or for the entire range of goods or services provided by a given company.
According to the systems used, discount cards are also divided into simple discount cards and cards with complex discounts, which in turn are divided into loyalty cards and payment (borrowed, prepaid, credit) discount cards.
As in the case of simple discount programs, in complex discount systems, a discount scale depending on the size of a one-time purchase can be used as an additional condition for the consumer.
That’s it, we’ve broken through the jungle of terms, now we can continue talking “in terms”.
Now almost everyone has rushed to introduce discount cards, but often these same cards are issued first, and only then they think about why. Nine out of 10 stores, after the issue, come to the conclusion that they need a discount card to increase customer loyalty, but customers can be retained in other ways, and discount cards in this sense only work if they are woven into the overall system of maintaining loyalty.
The option of selling cards as part of a loyalty program looks especially strange. You cannot make money from the consumer and count on his loyalty. Russians are ready to buy discount cards if their cost does not exceed 10% of the average bill. Considering that the average bill in most Samara supermarkets fluctuates around 300 rubles, calculate for yourself how much a discount card should cost.
The main advantage of a plastic card abroad is the ability to create a database of regular customers with its help. At the time the card is issued, the buyer must fill out a form. In this way, the company collects data on the age, social status, place of residence, and family of the consumer. The information is entered into the database, then all purchases of the cardholder are automatically taken into account.
According to experts, information obtained from the database helps trading companies work in three directions.
Management of assortment, prices, sales, etc. For example, you can track which products are not in demand among cardholders in order to remove them from the assortment. Purchase history allows you to select products for special offers, such as “two shampoos for the price of one,” and also predict demand for certain groups of products.
Impact on the buyer. Cards can force a visitor to make an unplanned purchase, for example, in addition to sausage, they can also buy a saucepan. There are many ways to manipulate the buyer, for example, a system of accumulative points in exchange for some product. At the same time, thanks to the database, the store can build closer relationships with customers, offering them additional services or simply sending New Year cards.
Improving the efficiency of working with suppliers. In developed countries, it is a common practice for a chain of stores to open up their database to their suppliers, although in our country this is still very difficult to imagine. Thus, the network shifts to partners the creation of a delivery schedule, assortment compilation and other headaches of the same kind.
So, in addition to “binding” the consumer, a discount card allows the company to solve several important problems, such as: attracting new customers, increasing sales, conducting marketing research, increasing the company’s image in the eyes of customers and competitors, creating additional advertising space, etc. and so on. The scope of application of discount cards is limited only by the imagination of the marketer introducing them, on the one hand, and the caution of the director, on the other.
According to the Magram MR study, our compatriots find cumulative discount cards most attractive, where all purchases are summed up and after a certain amount the discount amount increases. A similar example in Samara is the cards of the Implosion pharmacy chain, which, however, never bother to change from cardboard to plastic.
Have you already decided to order the first edition of your own discount cards tomorrow? Maybe you shouldn’t rush, since the card is still a document and, before putting it into circulation, you need to carefully weigh everything.
Usually, when they act wisely, the company first develops a special program for its implementation. It takes into account all the details: card design, circulation, distribution procedure, size of discounts, scale of influence, form of distribution, card expiration date, interaction with existing elements of the advertising campaign, control over the provision of discounts, equipping with special equipment for reading information.
The last two points will be determined by the choice of map type. Today there are three of them: a regular plastic (cardboard) card; magnetic card; smart card.
A regular plastic card is the simplest type of discount card. When making a purchase, the plastic card is presented to the cashier, who provides a discount. A regular card does not allow you to keep records of purchases and discounts provided, as well as control the cashier who accepts the discount card.
A magnetic discount card involves installing a computer (or a computer cash register) with a magnetic card reader. When making a purchase, the cashier inserts a magnetic card into a card reader connected to a computer. The discount amount is determined automatically, depending on the card category and purchase amount.
A magnetic card allows you to provide discounts on purchases; keep records of discounts and purchases for any period of time; change the discount amount depending on the total amount of purchases over the past period of time; automate the processing of information about discounts, cashiers’ work, etc.; using card data, analyze demand (conduct marketing research)
If a discount magnetic card is issued by a chain of stores, then information about purchases and discounts must be periodically (once a day) transferred to the central office of the trading company. This is done in the interests of the buyer, so that when he comes to any store, he receives the real amount of the discount achieved as a result of all his previous purchases.
A discount card in the form of a smart card is the most modern solution (and the most expensive) that allows you to provide for all the nuances that arise during the customer service process. A smart card performs the same functions as a magnetic card, but has a number of advantages.
In addition to the magnetic card capabilities mentioned above, it allows you to:
- store data about all purchases for a certain period of time on the card itself;
- store client data;
- add prizes, bonuses, benefits, etc. to the card, giving the client the right to make free purchases (for example, at the end of the year);
- introduce additional functions over time at the request of the company.
Smart cards easily allow you to add additional functions, client and other programs in the future and thus develop the system at the request of the customer.
Manufacturing costs directly depend on the type of cards chosen and the design bells and whistles on their surface. A smart card will cost more than a small piece of plastic without electronic “load”. As for design, the most impressive from a financial point of view is printing a full-color photograph, or decorating a card with gold and embossing. A very cheap option - printing cardboard discount cards, some of them were even numbered by hand, is gradually becoming a thing of the past.
The cost of cards also depends on the circulation, color, embossing (relief display of letters or numbers), finishing, personalization, etc. This service is provided by many companies even in Samara, not to mention Moscow. The average circulation is 300-500 pieces.
To reduce the cost of card production, sometimes several companies merge and create a single discount system.
Discount cards are also distributed in different ways.
Some stores, for example, thus reward a customer who has made an expensive purchase, or several purchases for a certain, usually very impressive, amount. This approach is quite popular and, in principle, quite effective. Firstly, the store “endears” the buyer by showing him a special sign of attention, expressing gratitude for his cooperation. Secondly, the number of discount card owners in this situation does not depend on the popularity of the project, but is determined only by the conditions (purchase amount) chosen by the store itself.
Another very common Russian option is when a discount card is offered to the buyer for a fee. The popularity of such cards is somewhat lower than in the first case. However, if the consumer nevertheless decides to purchase it, he is almost guaranteed to become a regular customer of the store (restaurant, airline, etc.).
The third option is when the card is distributed for a fee, but is at the same time an independent product. We are talking about extensive discount systems, when the card essentially does not belong to a specific store, retail chain or restaurant. In this case, the production and distribution of the card is carried out by a separate company, for which the discount card is an object of its own business. Such cards (universal), as a rule, are more expensive than those sold in stores, but the network of trade and service organizations included in the discount structure is very wide. By purchasing one card, the consumer gains the opportunity to enjoy discounts in several dozen companies, including, possibly, abroad. It’s difficult to call this type of card discount; in essence, they are already closer to club cards, which denote, first of all, belonging to a certain community of privileged individuals.
A separate headache for managers of enterprises introducing a discount system is the amount of discounts. There are no general recommendations here and cannot be, since the question is purely individual.
But still, there are several systems for providing discounts using a discount card that are common on the market today.
The classics teach that there is client loyalty to the discount program as such, but not to the company conducting it.
Most likely, with the introduction of a discount system, the purchasing power of customers will not change. The question is whether they will take the money they save with them or spend it in the same place where they received the discount, and with some premium. Before assigning the amount of a discount on a discount card by a strong-willed order from the general director, it would be nice to estimate the amount and structure of the costs of the average client for 1 visit to this establishment. Then estimate what percentage of the profit the owner can give up and divide it by the number of expected discount card holders (regular customers) per month.
In general, a discount makes sense when the amount saved plus an additional percentage (the longer the period of consumption of the product, the higher it is) can motivate a repeat or additional purchase. But for most enterprises, in any case, giving more than a 10% real discount does not make sense, since you can easily become unprofitable. With an overwhelming number of regular customers, it is easy to reduce profitability by foolishly introducing a discount. Ideally, model and play with numbers using the “What if...” principle.
The amount of the discount also depends on the purpose of introducing the discount system.
The simplest thing is to follow industry logic and maintain market position. In this case, the choice is small. If the stores are typical and do not differ much from competitors, then you have to react quickly and often - it seems. More often than not, there is little point in reinventing the wheel - the positions are more or less balanced. This, of course, is similar to a price war, in which, given equal starting conditions, everyone can lose. But that's life.
If the goal is a rapid increase in demand, then it requires a simple calculation. Obviously, if we operate with such an indicator as income per visitor, it is unlikely that a discount card will lead to a strong increase in the indicator; rather, it is a path to stabilization. Price for many consumers is an important component in the sense that there are certain price limits that a person tries to fit within, although this is not always the case. If you are interested in gross indicators and there is confidence in demand growth, then you can try to estimate how much the number of visitors will increase. You can test your assumptions either with the help of a special study, or experimentally, by introducing temporary cards (or temporary discounts) and seeing what comes of it.
Another question is the market capacity. Which clients will we fight for - new ones or have all of them already been taken over by competitors? Positioning will greatly depend on this. And if new customers can be lured to discounts, then with a sophisticated consumer we need to work on his loyalty.
Here it should be said that discount cards are not the only, and perhaps no longer the key element in the formation of loyalty. There are a lot of parameters that make up the customer’s attitude towards the store. This can be revealed through a simple survey. It is quite possible that the opportunity to pay less is not a value at all in the eyes of consumers, so why bother? It is better to ensure that the staff is well-trained and does not allow any failures.
But loyalty can also be “forced”. This happens when a reward is expected at the end of a certain period, that is, for example, a free dinner after a certain number of accumulated points (visits, etc.). Airlines use this method of incentives - the client does not receive a reward immediately, but by “proving” his loyalty. The disadvantage of this scheme is the fact that a client who strictly considers his benefits may come to the conclusion that he will receive greater benefits by visiting another, cheaper place.
To prevent this, an additional set of measures or simply a separate loyalty building program is needed. If it is important to attract an “expensive” buyer, then it is much preferable to create different levels of service, where the main value in the card is not the discount (although it is possible), but the level of privileges received.
The most important thing is to find distinctive benefits and present them to customers, ranking their access to these benefits according to their contribution. It is very important not to offend the new buyer, but to interest him in receiving a preference.
Many companies, instead of a single card, offer their clients several card options, each of which has a number of differences. For example, there is a very popular system of dividing cards into “silver”, “gold”, “platinum”, “diamond”, etc.
The first in this case costs much less than the second, third and fourth (with free distribution it is issued for the purchase of a less expensive product / service), but the amount of discounts that its owner can count on is lower than that of more privileged cards.
The discount itself can be absolutely fixed, partially fixed or “free”.
In the first case, the owner in any situation can count on the amount of the discount declared on the card. Regardless of the type of product purchased and the purchase amount, he consistently saves, for example, 10% of the total cost.
The option with a partially fixed discount provides for a change in its value depending on the type of product or purchase amount. For example, for one product the discount rate can be set at 5%, for another 10%, for a third 15%. If we are talking about the amount, then suppose that when purchasing a product for 200 rubles, there is a 0.5% discount, for 1000 rubles - already 5%, etc.
As for the “free” discount, in practice it looks like this: the store unilaterally changes the amount of discounts each time, guided by its own considerations about sales efficiency. The amount of the discount in this case may be affected by changes in demand, the appearance of a new product, upcoming holidays, etc.
At the same time, the principle of providing a discount can also be different, for example, a specific discount amount is established for a specific product, or a cumulative system operates (with each new purchase the percentage of the total discount increases), or the discount begins to operate only after exceeding a certain purchase amount.
A fixed discount is most often associated with impersonal discount cards, and a “free” discount is associated with personalized ones. Given the existence of a conventional discount system, there are no incentives to acquire a personal card; most often this is why unjustified attempts to convert an impersonal system into a personal one fail. Personalized cards are successfully used where “personal”, “trust” relationships exist: payment systems, closed clubs, etc., when it is simply unprofitable to transfer your card to another.
For impersonal cards, the more they circulate, the better, although business managers are often afraid of this, since it is impossible to create a customer database using impersonal cards. But this is just a common misconception. Firstly, you can create a database of those to whom these cards were originally issued and build communications with them. There is nothing terrible here, but it is necessary to take into account the fact that the card is mobile in direct mailings, based on the consideration that the card still leaves its owner for a short time and tends to return to him, and additional advertising addressed to the same person can serve as the basis for a positive recommendation to a friend, given along with the card.
Secondly, write down the coordinates of the people who came with the card, while coming up with a plausible answer to the question: “Why do you need my last name and phone number?” From personal experience, I can say that in most cases a simple thing works: “our program requires it,” although you can frankly admit that you are writing it down in order to notify about winning a card in the store’s next lottery. You can, for example, enter the buyer's demographic information and the card number he presented into warranty cards. Then it becomes possible to find the most popular card and offer a big discount or some additional bonus on it.
It is not necessary to issue discount cards to everyone; you can highlight your promising category of clients and issue cards only to them. Moreover, it is possible to distinguish not only by standard geographical or age characteristics, but by psychological, behavior, for example, or by consumption situation.
In general, discount cards as a way to attract customers, of course, work, but not for very long, alas. It is more effective to develop them as a basis for a loyalty program, but there are pitfalls here, especially when working with a highly profitable audience.
In addition to discount cards, bonus cards have also recently become widespread. If discount cards imply discounts on the entire assortment of the store or on some of its items, then bonus cards make it possible to accumulate reward points, for a certain amount of which you can receive a gift. For example, in all restaurants of the Moscow Rostik Group, reward points are awarded to the client’s card - 10% of the order amount. These bonuses can be used to pay for orders at any of the chain’s establishments.
Bonus cards are considered more effective than discount cards for use in customer loyalty programs, especially when it comes to representatives of the middle class and above. As income grows, the discount ceases to act as a decisive factor when choosing a seller of goods/services and in itself is of no interest to the buyer. The concept of a discount in advance implies "today". You gave it, the client used it and left. It is important for wealthy visitors to feel part of a select society and confirm their status. Some of them may be offended by a discount, especially a small one. They want more than just a discount, which is why bonus programs for this category are considered more effective. Even more effective for this group of the population are club programs in which the image component almost completely covers the economic benefit, and such programs have already begun to actively develop in Russia and are taking their first steps on Samara soil, but this is a completely different story...
The main thing that should not be forgotten when introducing any type of cards is that the main emphasis will still have to be placed on the assortment, service and additional services. The card is a symbol of all of the above, and the discount on it is a nice addition.
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