What is a loyalty programme?

The paper stamp card has kept coffee shops' regulars coming back for decades. A loyalty programme does the same job with more information: it rewards people for returning, and it tells you who they are.

Common kinds

• Stamps — buy nine, get the tenth free. Simple and understood by everyone.
• Points — earn points for every pound spent, spend them on rewards.
• Tiers — the more a customer spends, the higher their tier and the better their rewards.
• Referrals — reward a customer for bringing a friend.

Why it matters

• It gives people a reason to choose you again, and to be recognised when they do.
• It turns anonymous sales into a customer history, which is what makes customer retention and lifetime value measurable.
• It gives you people to tell about a new menu — if they have agreed to hear from you.

What a reward costs

A free £3.50 coffee costs you its ingredient cost — perhaps 60p — not £3.50. Plan rewards at cost, and the programme is cheaper than it looks.

Cost of rewards = rewards redeemed × cost of each reward

Designing one that works

1. Make the first reward reachable. If it takes a year, people give up.
2. Keep the rules short. One sentence a customer can repeat.
3. Recognise people at the till, not only in an app.
4. Ask for consent before marketing. Joining a loyalty scheme is not agreeing to emails.

Common mistakes

1. Rewards that cost more than they bring back. Track redemptions against repeat visits.
2. Too much to sign up. A phone number or an email is enough.
3. Never using the data. The list of your regulars is the most valuable thing the programme makes.

In DUMA

DUMA has loyalty built into customer records: points, tiers and referral codes, with each customer's order history and marketing consent in the same place. Guests ordering by QR code can link an order to their loyalty account with their email.