Will the majority of your customers use your rewards technology?

With so many new technologies emerging, it’s tough to find the right one that suits your business.  As a restaurant or cafe, one of your primary objectives is to turn a new customer into a loyal customer.  Though great food and great service play a key role, a new generation of customers are asking for much more from a business: they want recognition, they want rewards, and they want special treatment.

To facilitate this relationship with a loyal customer, many businesses are turning to rewards programs.  You have four options to choose from for your rewards program:

  1. Punch card
  2. Magnetic rewards card
  3. Gaming apps such as Foursquare or SCVNGR
  4. Loyalty Management Apps such as RewardMe

Lets dissect each solution and how it applies to your mainstream customer – the majority of your clientele.

1. Punch Cards

% of customers that CAN use a punch card: 100%


  1. Low cost
  2. Simple for the cashier
  3. Can be used by all customers


  1. Easy to cheat
  2. Customers often lose their punch card
  3. No deep relationship built with the customer

Mainstream use: Yes, mainstream customers use punch cards everyday at cafes or yogurt shops.  The problem is that customers often lose the punch card, throw it away, or forget to use it.

Furthermore, the relationship between the business and the customer stops at the “punch.”  Do you know the customer’s preferences?  Can you contact this loyal customer through email or on his phone?  Do you recognize this customer in any way so that it makes him feel special?

A punch card is an old form of marketing that is no longer capable of satisfying the needs of a business.

2. Magnetic Cards

% of customers that CAN use a use a magnetic rewards card: 95%


  1. Able to track price and items purchased
  2. Simple for the server
  3. Can be used by the majority of customers


  1. Expensive
  2. Lengthy sign up process
  3. Another card to carry in the wallet

Mainstream use: Like punch cards, magnetic rewards cards are commonly used by the mainstream customer.  They use supermarket and retail rewards card all the time; but there in lies the problem – how much room do they have in their wallet for another rewards card?

Furthermore, how much do you have in your budget for an expensive solution?  Though magnetic rewards cards give you a lot of information about the customer, it can be overwhelming – 4/5 of companies that use magnetic rewards cards use only 10% of the features.

Customers want something quick and easy.  Magnetic rewards cards require customers to fill out a form and give out their email or phone number to join your program.  It’s this tedious process that is avoided by the new generation of tech-savvy customers – they’re impatient, want their reward now, and hate to carry around something physical in their wallet when they don’t have to.

3. Location-based Gaming Apps

% of customers that use a gaming app: 1.6%


  1. Targets a group of customers that use Facebook, Twitter, and Yelp


  1. Only 1 out of 100 of your customers uses a gaming app
  2. Does not verify a purchase
  3. Distracts the customer from the dining experience

Mainstream use: If only 1 out of 100 of your customers uses a gaming app, then it is clearly not used by the mainstream customer.

If you use a gaming app such as Foursquare as your main rewards program, then you’re excluding the vast majority of your customers from earning rewards at your business.  More importantly, it’s NOT your rewards program – it’s Foursquare’s rewards program.

In essence, it’s Foursquare’s job to get you customers, but you would never ask your customer to download Foursquare in order to join your rewards program; it just doesn’t make sense.

You need your very own rewards program.  You need your cashier or your server to be able to tell you best customers to “join OUR rewards program.”

4. Loyalty Management Apps

% of customers that can use a loyalty app: 30%


  1. Verified purchase
  2. Quick and easy to join
  3. Low cost
  4. Builds a relationship between the customer and the business


  1. Does not track purchase amount

Mainstream use: Will the majority of your customers use your rewards program if it was on a mobile application?  30% of your customers have a smart phone and 95% of iPhone and Android users have downloaded at least 1 application.  Given the right incentive, smart-phone customers will download your rewards program.

With a loyalty management app, your server or cashier can tell the customer to “join OUR rewards program.”  It’s the digital form of the punch card and magnetic card that mainstream customers used to love so much.

In the beginning of 2011, 30% of your customers can use an app such as RewardMe; by the end of 2011, 40% of your customers will be able to use RewardMe.  The number of smart phones users is growing rapidly.

How will you provide rewards to your best customers?

Get mentored by Yu-kai Chou

Octalysis Prime Gamification

Every week I hop on a conference call to teach, answer questions, and give feedback to members of Octalysis Prime. If you want to take your Gamification practice to the next level, then come join us.


If you are interested in working with Yu-kai Chou for a business project, workshop, speech or presentation, or licensing deal, please fill out the form below..

Please enable JavaScript in your browser to complete this form.

One thought on “Will the majority of your customers use your rewards technology?”

  1. <a href=”http://www.livingdownriver.com/edutech.asp”>uggs canada</a>

    <a href=”http://www.livingdownriver.com/edutech.asp”>uggs canada outlet  </a>
    For many football fans this month, the excitement of seeing their favorite side play the first game of a new season will likely be 

    teamed with frustration over strict new regulations governing what types of bags can be brought into stadiums.
    Less than a month after <a href=”http://www.livingdownriver.com/edutech.asp”>cheap uggs canada</a>
     April’s deadly Boston Marathon bombings, the NFL’s Stadium Security Committee voted unanimously to limit the size and type of bags 

    allowed into stadiums.<a href=”http://www.livingdownriver.com/edutech.asp”>uggs canada sale </a>

    <a href=”http://www.livingdownriver.com/edutech.asp”>mini uggs canada</a>The new rules ruffled more than a few feathers as excited 

    fans attempted to get into preseason games last week,<a href=”http://www.livingdownriver.com/edutech.asp”>uggs canada cheap online</a> 

    only to find that the bags they were accustomed to bringing in were no longer allowed.
    “I had season tickets for over <a href=”http://www.livingdownriver.com/edutech.asp”>uggs canada kids</a>36 years and they continue to 

    complicate things over and over again,” a Cleveland Browns fan said on his way into the game last Thursday.
    The new rules state that fans are allowed to bring in one small clutch style purse, plus a one gallon plastic storage bag or a bag 

    provided by the team that measures about 12 inches by 12 inches.<a href=”http://www.livingdownriver.com/edutech.asp”>uggs canada 

    <a href=”http://ww.inrefinance.com”>uggs canada</a> Those who fail to comply with the new rules will be turned away.<a 

    href=”http://ww.inrefinance.com”>uggs canada outlet</a>
    An NFL spokesman said the policy is not meant to make the fan experience more difficult, but only “to deliver a better and quicker 

    experience at the gates and also provide a safer environment.”<a href=”http://ww.inrefinance.com”>cheap uggs canada</a>
    While there may be growing pains as fans return for <a href=”http://ww.inrefinance.com”>uggs canada clearance</a> the start of the 

    2013 NFL season, league officials believe the football faithful will soon adapt without problem.   <a 

    href=”http://ww.inrefinance.com”>uggs canada sale </a>
    <a href=”http://ww.inrefinance.com”>mini uggs canada</a>“I understand the safety procedures, I understand the caution that they’re 

    going through,”<a href=”http://ww.inrefinance.com”>uggs canada cheap online</a> said one fan, whose large purse was not allowed into 

    the game.<a href=”http://ww.inrefinance.com”>uggs canada kids</a>

You must engage in the conversation!!