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Loyalty Programs Boost Sales: Punchcard Research

Merchants who use loyalty programs see lifts by as much as 33 percent from consumers who opt in and use a loyalty program, according to research from Punchcard.

“We think this is significant in light of the billions of dollars that are spent on local consumer acquisition,” Punchcard CEO Andy Steuer told Loyalty 360.

Researching some 500,000 customer transactions, Punchcard learned that customers frequenting cafes and other food and drink establishments spent 33 percent more; those shopping at grocery outlets spent 23 percent more; pet supplies, 21 percent more; apparel, 18 percent; entertainment and nightlife, 16 percent; health and beauty, 14 percent; and office supplies, 7 percent.

Punchcard data also showed that smart phone users at many of the major brands, including Bristol Farms, Crate & Barrel, Nordstrom’s Whole Foods, Trader Joe’s and 99 Cent Only stores were far more likely to be iPhone users. Other brands also had more iPhone than Android users, though the difference was not as pronounced as the others.

Android was the more likely choice for consumers at El Pollo Loco, McDonald’s, Wal-Mart, CVS and 7-Eleven.

Consumers use Punchcard at more than 15 million retail locations, according to Steuer.

Punchcard is a local shopping app where enabling users to earn personalized rewards everywhere they shop. Users make their purchase(s), and then use the Punchcard app to take a photo of the receipt to earn a “punch” for that business. Punches eventually translate into cash back or merchandise rewards (i.e., 10 punches at a café for a free coffee).

Customers can also earn punches from referrals through “punch your friends.”

A major advantage of the Punchcard solution is that the customers don’t need to keep the loyalty cards in their wallets. All that’s necessary is a smart phone and the app.

“This, in my opinion, is what loyalty is: the expression of your affinity for a retailer or brand because you enjoy the product and/or service that you get from that company, and feel that the price that you spend with that brand/retailer is an equitable exchange,” Steuer added.

In addition to helping merchants build loyal customers, the Punchcard app also provides merchants with data about their consumers, including customer spend, customer frequency, type of device used (iPhone or Android-based), as well as connections to the consumer’s Facebook accounts.

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