loyalty programs

Loyalty programs: bankable points vs. punch cards

By Megan Prevost

Everyone has their favourite restaurant. The one they go to when they want to celebrate or need a pick-up. The one that they pick when they can’t think of anything else.

How do you think these restaurants become such a staple in people’s lives? Oftentimes, delicious food and a great experience keep people coming back again and again. But there are other methods that keep customers sticking around for more.

Starting up a loyalty program is increasingly recognized as a key way to help encourage regular or repeat customers. But how do you choose the right type of loyalty program for your full-service or quick-service restaurant?

How do loyalty programs benefit your restaurant?

Loyalty programs are a great way to connect with customers who might be interested in making your restaurant an everyday part of their life. People, in general, like routine. They enjoy having a place to go that makes them feel comfortable and at home. When you ask a friend where they want to go for dinner, they’ll often rattle off the same two or three places every time, their favourite spots. Creating a loyalty program can help you break into those elusive lists.

RELATED: Understanding loyalty programs in the pandemic age

After you’ve managed to get a person into your restaurant, coffee shop, or bar for the first time, you’ve done most of the hard work. Once they’re inside, you must convince them to come back again and again. And while, of course, you can do this with fantastic customer service, delicious food, and a welcoming atmosphere, loyalty programs give customers the extra push they might need to make that return trip.

Loyalty programs often come in punch cards or bankable point varieties. However, whatever the form, the main point of a loyalty program is to provide returning customers with an incentive to keep coming back. This often comes in the form of a free item, such as an entree, appetizer, or drink. After they’ve collected a certain number of punches or points, they get to redeem them for their free item. After that first free item, they start accumulating points or punches again. Rinse and repeat, and voila, you have a loyal returning customer.

RELATED: When it comes to customer loyalty, mobile apps are the key to the lock

Punch cards

Punch cards are incredibly common amongst small businesses. They often come in the form of business cards and require that the customer keeps the card on them to receive a punch or stamp each time they visit. Most restaurants or cafes will set a specific guideline for what merits a punch. For example, a coffee shop might give out a punch for each coffee purchase while a sandwich shop might give out a punch for each sandwich purchase. Punch cards, in general, are a great option for quick-service restaurants like coffee shops, ice cream places, and delis that have frequent customers who don’t spend a ton of money on each visit.

Pros:

  • They’re very simple to launch. Simply choose a punch card template and have them printed out.
  • They’re cheap to produce and maintain.
  • They’re easy for non-tech savvy customers to learn how to use.
  • They’re nice and portable. Fit easily into most standard wallets and pocket purses.

Cons:

  • Customers are required to carry a punch card. If they forget their card (or lose it), they’ll have to get another one and start over.
  • Punch cards may be easier to counterfeit if you use a simple punch. Using a custom stamp is a good way to counteract this.
  • It’s not as easy to measure the success of physical cards.

Bankable points

Bankable points are another popular type of loyalty program that requires the restaurant or cafe owner to invest in a system that keeps track of the points for customers. This may require the customer to download an app or give their phone number to their server or cashier every time they check out. Many popular establishments, like Starbucks and Chick-Fil-A, use these types of programs.

Some places also allow customers to scan QR codes to redeem their points. These QR codes are often located on takeout containers or to-go bags, allowing customers to redeem points even when they order through a third party.

Instead of getting a punch per item, customers receive a number of points based on the amount of money they spend in the restaurant. This makes it a great program for places where customers might spend larger amounts of money. Bankable point programs also allow patrons to choose their reward, offering low-level and higher-level freebies that vary in point range.

Pros:

  • It’s easier to track the success of your loyalty program.
  • Customers can’t lose their bankable points, since they’re tied to an account instead of a piece of paper.
  • Customers have access to a variety of different rewards with varying point values.

Cons:

  • Customers who aren’t tech-savvy might have trouble learning how to use a bankable points program.
  • People might not want to download an app or give their phone number.
  • Third-party services that host these programs often require a monthly subscription.

Choosing the right loyalty program

Both bankable point and punch card programs are great options, but they’re not right for all types of establishments. Think about your restaurant and what you want to accomplish with your loyalty program. Would your customers find it easier to use a punch card or app solution? Based on these factors, make a decision that best suits your needs! And of course, you can always try out both and see which one works best for you and your customers.

Megan Prevost is a marketing content writer for MustHaveMenus. Her work has appeared in App Institute, Bar Business, Modern Restaurant Management, Small Business Currents, PMQ, FSR, The Daily Fandom, and FanSided.

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