Many of us choose a credit card over some other credit card because it offers a points program that we use for things like hotel stays for a family vacation. These types of perks can change a customer's decision making to buy with that card or in this case, buy from you.  Some are concerned that a Loyalty Program can get too expensive and it is possible to create an underperforming loyalty program.  At LoyalShops we understand this and give you capabilities to lower the inefficiencies offering such a program while enticing customers to stay purchasing from your business and give you additional marketing opportunities to reach them.

One challenge I have seen with basic Punch loyalty programs is they treat your customers that buy mostly low-end margin products the same as those that buy more profitable higher-end products.  It can be too limited and customer rich, thus driving rewards too early for low average selling price customers, even rewarding low-end customers with much more value than your high-end customers.  We designed our Points Loyalty to address those issues and more. I'll highlight that for those considering Loyalty and for those considering why they would want to switch from a Punch Service, even LoyalShops, to the LoyalShops Points Service.  

Let's review a basic punch program scenario, then highlight a more advanced points programs differentiated benefits.

Assume the basic punch program offering is: Buy 10 items, get avg item you sell (a $25 retail value). Then we will assume "low-end buyer" buys $12 items from you most of the time - as a worst-case in this example and "high-end buyer" buys items all the time for $55.

Low-end buyer buys 10 $12 items and brings $120 into your shop, and perhaps $60 gross profit. They now get a $25 retail value with that reward or a 20% retail value back on their purchases from you. Too high and leaves a bad taste in your mouth. This also assumes these items were all full price versus some discounting/sales, which could further damage margins.

High-end buyer buys purchases ten items at $55 and thus brought in $550 into your business or $225 gross profit after wholesale purchase. This customer then gets a $25 retail value, but that is only 4.5% retail value of what they have brought into your boutique. Thus the low-end buyer gets rewarded as often and with a much higher value.

Now contrast that with the LoyalShops Points Loyalty. First, there are throttles for loyalty built-in. If an item is below $X, you can choose to give zero loyalty automatically. If an item is at or above Y% of sales discount (line item, order discount or promo code based), it will automatically get zero loyalty points. If neither of those throttles is met, Points value scales with discounts above those zero loyalty thresholds I just mentioned. For example, if an item is $50 and you give the customer a 20% discount, they would not get 50 points, they would get points based on their final price paid. So 20% off, would be a $40 item, and thus, they would get 40 points (assuming your max % discount threshold is > than 20%). These two tools alone significantly reduce the number of gifts given and reduced explicitly for those that don't deserve to earn such gifts so quickly or without bringing in enough profit into your business to cover the cost for the loyalty program vs increased business. It also delays the giving of gifts for a longer period of time. So you can still offer a Loyalty Program, but take less time fulfilling rewards.

Another key point in the Punch vs. LoyalShops Points comparison is with Low-End Shopper vs. High-End Shoppers as well is giving appropriate loyalty value back to customers based on the revenue/profit they bring in.  By default, the base gift with LoyalShops points is given at 350 points or $350.  These settings are completely adjustable for all levels of business sales for $5 to $1,000 items, etc.  Using the previous above example, Low-End Shopper buying $12 items must buy 29 items, not 10, in order to earn the basic gift with default settings. That means when that Low-End Shopper redeems a Loyalty Reward for a gift, they are getting a 7% retail value gift for the amount of money they brought into your business.  This is in stark contrast of 20% value they would have earned with their gift if it had been a punch service.  Thus this shopper needed to purchase nearly 3X longer to earn that gift due to their purchases always being very low average selling prices. Now let's discuss the other end of the spectrum with a High-End Shopper example buying $55 items. Because she has bought full-priced $55 items, she would earn a gift in 6 purchases, and that also would be a 7% retail value gift given to them. 

With Points Loyalty:
High-end shoppers earn rewards faster than low-end shoppers.
Rewards are neutralized to how much revenue/profit they have brought in.
Not just based on 10 purchases of any price / any discount level where low-end buyers are rewarded much higher than your best customers.



We also offer up to 3 gift levels with LoyalShops Points and a VIP tier so you can further separate your standard shoppers versus your VIP shoppers with a full second tier of target point levels and gifts.

Another point I'd like to highlight is reaching these customers with messages. LoyalShops marketing emails have around a 25% open rate, better than posting on Facebook and a useful additional channel. But each time a customer makes a purchase and earns points, LoyalShops sends out an email with what they have earned. The average open rate in the recent past for retailer marketing blasts was 25.3%. Points Emails were 171.8% open rate, and Gift emails were 150.5%. Clearly, these emails are being opened multiple times and appreciated. These emails can be adjusted to drive further marketing messages, education to reduce non-IPA activities, etc. I wanted to highlight this as I see it as an under-utilized and under-appreciated customer touchpoint.  We allow you to modify these default gift/loyalty templates to deliver additional messages beyond just loyalty.  

Then, we offer Gift Expiration, so 30 or 60 days later, if the customer hasn't used their gift, an email goes out automatically to notify them they haven't used their gift and use it in the next 10 days or it deletes.

They either come back and shop (ideal as they are likely to buy additional items)  or the gift is automatically removed keeping the program clean and managed.

Gifts given are all tracked per year and exportable for tax purposes.