Bringing them back for more – punch-card promotion

Denise Osburn

‘Make new friends, but keep the old; one is silver and the other gold.” That’s from a Brownie Girl Scout song, but grown-up business people can profit from such an approach as well.

“The lifeline of any business is repeat business,” according to Ramon Avila, a marketing professor at Ball State University, in Muncie, Ind. “It is expensive to attract new customers. It’s easier to get regular customers to buy more.”

A punch-card promotion is one way to keep customers coming back. Such a program typically works like this: The company gives its customers a card–about the size and weight of a business card. The customer has the card punched or stamped each time a purchase is made. After a certain number of punches, the customer becomes eligible for something free–a product, a meal, a service-depending on the type of company offering the promotion. The customer turns in the completed card to get whatever is being offered for free.

Avila sees three main benefits of punch-card promotions: They help build regular clientele; they serve as advertising by reminding customers about the business; and they foster goodwill by rewarding regular customers.

There is a lack of hard data showing how much repeat business punch cards are likely to generate and how many companies actually use the promotions. Avila, however, has interviewed a number of customers of selected businesses who say they wouldn’t patronize the businesses as often as they do if they couldn’t take advantage of punch cards.

Having a punch-card promotion requires that the business owner be mindful of a few details. Businesses with multiple locations can run into a problem of keeping cards in stock at each outlet. Sufficient cards have to be printed for each location.

Punch-card promotions are used by all kinds of businesses. Geoff Schutt, owner of Village Bean Barrel, in Tiffin, Ohio, gives his customers a Caffe Nero Coffee Club card. The card has 18 squares, each representing a half-pound purchase. When all of the squares on a card are filled in, the customer gets a free pound of coffee.

Cheryl Lavimodiere, manager of Wedgewood Driving Range, in Ottawa Lake, Mich., says golfers have their cards punched each time they purchase a bucket of balls. The range allows up to three punches a day. When a card has been punched 10 times, the golfer can exchange the completed card for a free bucket of balls.

Jim Reiff, owner of Brooklyn Coin Laundry in Brooklyn, Mich., inherited a punch-card program from the owner. Customers are given “Wash Cards” that have 10 circles on the front and the customer’s name and address printed on the back. Each time the customer visits the laundry, a circle is stamped. After 10 stamps, the customer receives a free wash and puts the card in a bowl for a monthly drawing; the winner gets five free washes.

Business owners who use punch cards say the main goal is to encourage repeat business and help make customers happy “We don’t see it as a way of promoting new business,” according to Lavimodiere. “It’s simply done to reward customers.”

Reff says giving new customers punch cards often brings them back. “It is more effective than any other advertising we do,” he says. “It gives you a reason to talk to new customers. You give them the card, and it gets them to return. I really think it keeps them from going to other laundries.”

For companies that honor them, punch cards are simple but effective. Village Bean Barrel started its punch-card promotion about a year ago, and so far it has given away about 60 pounds of free coffee. “We’re not giving away much, but we have increased traffic,”. Schutt says.

The cost of a punch card is the same as that of a 10-percent-off coupon for a 10-pound purchase, Schutt points out, “except with the coupon, we might never see the person again.”

Keep in mind that punch-card promotions, like any form of promotion or advertising, can’t take the place of quality and service, which customers rely on.

Says Avila: “Give good customer service, and reward loyal customers–the punch card is one way–and you’ll keep good customers coming back.”

COPYRIGHT 1995 U.S. Chamber of Commerce

COPYRIGHT 2004 Gale Group

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