"It costs as much as six to ten times more to acquire a new customer than to maintain an existing one."
-Wall Street Journal
In an increasingly competitive retail environment, it takes three steps to build a solid customer base: Step 1: Get the customer to visit your store; Step 2: Make sure he stays your customer; Step 3: Increase frequency of his return and the amount of each purchase. How does a retail merchant accomplish this in one step? Implement a "One Card Does It All" Gift and Loyalty Card Program Solution.
In the merchant acquiring marketplace, it also takes three steps to build and retain a merchant portfolio that is loyal, and not perpetually falling for the "lowest rate" sales pitch. Step 1: Offer each new or existing merchant in your portfolio a private label card solution that enhances brand exposure, builds revenue, and increases average ticket; Step 2: Encourage your merchant to reward its customers with card based reward currency that keeps customers coming back (e.g., points for prizes, value back on every purchase); Step 3: Deploy a solution that enables merchants to card every customer quickly and inexpensively.
Smart-card based private label card solutions allow both merchants and resellers to set themselves apart in the often crowded value added product arena. Smart cards are more durable, more secure, and they give merchants the ability to perform both gift and loyalty transactions on one card. Moreover, recently developed smart card software applications, such as those developed by Neos Merchant Solutions, empower the retail merchant to rapidly capture customer contact information and track spending habits on each issued card.
Smart cards allow data to be written and read on the card. As a result, the terminal does not communicate with a host (i.e., dial out) every time card transactions occur. The resulting transaction is rapid (i.e., a few seconds). Cards are issued quickly. Transaction fees are eliminated and overall program costs are reduced. Smart card applications thus solve the three traditional barriers faced by merchants when deciding to implement a card program: Time of Transaction, Cost of Transaction, and Security of Transaction.
By implementing a one-card gift and loyalty solution, small to medium sized merchants are able to deploy a program that looks as good, and likely performs better, than any Fortune 500 retailer card program.
"70% of U.S. households surveyed participate in some form of loyalty programs and 83% of these households use them every time they shop at those stores."
-ACNielsen
Gift cards are rapidly becoming the U.S. consumers' gift of choice. As a result, retailers are afforded the powerful opportunity to card a customer once and convert every gift card recipient into a loyal customer, or vice versa. Once a merchant cards that customer that he has worked so hard to acquire, he gives them many reasons to return in the form of private currency stored on the card: points, value back, visits credits, etc.
"Raising customer retention rates by 5% could increase value (profits) by 25% to 100%"
-Bain & Company
Merchant wins. Customer wins. How does a merchant acquiring entity win? By insuring the retention of your retail merchant processing portfolio by offering your existing and new merchants the best private label card program solutions available in the marketplace today.
Neos can implement a fully operational smart card based gift and loyalty program in as few as ten days. For more information, contact Charles Christianson by e-mail at cchristianson
Smart Cards Fuel Customer Retention Initiatives
December 01, 2004, 12:04 p.m. EST 3 Min Read
