SP-1 has a very powerful gift and rewards program that is 100% free. I thought I’d be fun to cover the three different options we have for rewards in the system.
1) Buy 10 get 1 free. There are a number of variations on this but the basic premise is that a customer gets one free drink for every ten they buy.
Pros: The great thing about this is that it is simple and easy to explain. Your customers will feel that they are getting something free. The theory is that customers keep coming back as they have that next reward to look forward to.
Cons? It’s only really available in one category. Also, it encourages customers to buy cheap drinks and then ask for a more expensive drink as their free one. That can actually be a pro however. We have customers that encourage the free drink to be something the customer does not normally try.
2) Points. This is a variation on the above. Instead of earning rewards based on the quantity of drinks purchased, it is based on the dollar amount purchased. Usually one point equals one dollar. For example – 35 points is a $3.50 drink.
Pros: It stops the guys from buying $2.00 drip and then getting a $5.00 mocha. Also, you can have up to five levels of redemption. For example, 35 points is $3.50 off. $50 points is $3.50 drink and a muffin and so on. Finally, you can use this on more than one category. This is a more flexible version of the above.
Cons: It’s difficult to explain quickly to customers.
3) Percent Back. This is a completely different thought. Instead of points or punches, customers earn a percentage back on each purchase. Usually 5%-10%. This cash back goes on the customer gift card for their next purchase.
Pros: It’s free money to the customer. They can spend it whenever and however they like. This also keeps the customer thinking they have cash on their card. It’s pretty easy to explain as well. From a psychology standpoint, the customer is never getting a free drink. They are always purchasing it with their gift card money. This means you are rarely devaluing your product. Finally, you can easily change the percentage or end the reward at any time because the customer automatically has their money. With the other two methods it can be hard to end the program because the customers perceive that they are losing points or punches.
Cons: They are never really seeing the “free” aspect of the reward.
There you go! Give us a call and see it in action.