I hate loyalty punch cards and discount refills of our mugs

Bean007

New member
Feb 8, 2005
7
0
Cortland, OH
I don't mean to sound too negative, but this morning, as most mornings, I have given away more lattes and mochas than I sold, and about half of my morning customers refilled our 12oz logo mugs for a mere 50 cents. The refillers get a punch on their card, two on Two-for-Tuesday, and then get a 20oz mocha after the tenth cup.

I know these are good promotional tools and I'm getting advertising from them using our mugs, but it seems that the busiest time of day has the lowest average income per customer. My average ring for the day is around 3.00, much less than the 4.80 I read in books and I planned my financial budget around.

I've tried upselling breakfast bars and sandwiches to get the 50 centers to cough up a few more pennies but it's not going so well.

I don't feel that it's right to take away the promotions, but is there a way I can make them more beneficial to me? Should I raise the refill price to 75 cents, increase the number of punches before a free one is given, limit the free drinks to a certain size/type or have two separate punch cards, one for refills and another for specialty drinks?

I thought about increasing the possibility of customers loosing cards by offering to take two fully punched cards for a half pound of whole beans, or three for a whole pound. The material givaway would be close to that of 2 or 3 mochas but the chance of giving it away decreases and it would promote whole bean sales.

I feel it should be easier to get my regulars (they've been coming for a year now) to spend more each visit than to attract new customers with costly advertising. I just can't figure out how. Any advice will be much appreciated.
 

Muddycup

New member
Dec 4, 2005
201
0
New York
it sounds to me that maybe you over sold your loyalty cards and complicated your system in favor of the customer. I do not have a card system and have operated without one for 5years.

I do think it is a good idea, but you have to be careful not to "give away the store"

I am also reluctent to start one because I think people will find away to cheat the system and maybe punch their own cards.

I know it is difficult to go back on a system once it is out there, but maybe it is time you slowly begin to rein in your discounts.
 

CCafe

New member
Aug 11, 2004
1,557
1
Des Moines, Iowa
Punch cards are worthless. I would like to see a bar code system that works hand in hand with the POS. Scan their card and for every drink that is purchased the system counts it. To keep your sales person honest, the till will be off if they try to add more drinks with out paying for them.
 

jmeiss

New member
Dec 5, 2005
65
0
Lenexa, Kansas
CCafe said:
Punch cards are worthless. I would like to see a bar code system that works hand in hand with the POS. Scan their card and for every drink that is purchased the system counts it. To keep your sales person honest, the till will be off if they try to add more drinks with out paying for them.

Anyone know of a good loyalty card system like you see at grocery stores? What about gift cards?

Thanks in advance..

-Jeremy
 

Coffee Guy

New member
Oct 19, 2003
874
0
Seattle,Washington USA
Well here's a subject near and dear to my heart :D First off, what type of establishment do you operate? Coffee shop, cafe, drive thru? There are differences in how to reward your customers in each. Secondly, how much competition is in your area, and what kind of rewards system do they offer? And finally, what were your intentions in offering a rewards system anyway? Although it is always nice to make more money, you can't do that unless you have customers. You may be in danger if you decide to drop your punch cards since you already have them in play. Put yourself in yoour customer's shoes. Wouldn't you frequent a place more if there were rewards involved? You bet you would. That is one of the reasons you keep coming. I'm assuming that you must be a cafe or coffee shop since you offer refills. If that being the case, why not try to offer combination discounts or specials of the day. Feature something different each day to increase both your till and your customer's participation. As for another system for punch cards, they do have systems like "Coffee Shop Manager". This system is sort of like a credit card system where each time a customer purchases something you swipe their card in your register and it accesses some sort of value and will then tell you, the operator when to issue a free drink, etc. This method is very popular here in Washington State, and a lot of espresso businesses have gone to them. You can also offer pre paid cards. Customers like these because they can pay for a prepaid amount of drinks, snacks or however your decide to set them up. Plus you get the money up front. You would be suprised how fast customers spend them up.

Well that's about all I have for now, my brain is starting to hurt. Just thought I'd offer my two cents :wink:

Good luck!
 

Rockcreekcoffee

New member
Dec 8, 2004
39
0
Billings, MT
Customer Loyalty

I do have a customer loyalty program in my POS system. My system runs by points (for every 10 points they get a drink free).

I never give them a point for a refill. The points are only good on full-price drinks only. I would do away with the Two for Tuesday. Give your customer about 3 months with small sign at your register letting them know that you'll be discontinuing that promotion. If they ask for the details let them know why.

I lost 4 regular customers earlier this year because they were upset that they needed to pay for their refills. It has been a policy ever since they have been coming in, but they didn't want to adhere to the policy and we didn't "enforce it", on the grounds that we would loose their business.

So at the beginning of this year, I put a little sign out that coffee refills would be 50 cents and they asked about it and I told them that it has been our policy ever since we opened. They got mad and told me they could get a medium cup down the street for a $1.00 and get as many refills as they wanted. SO, they did. I can't help it but I am tired of giving my hard earn $$ away to "customers" that basically steal it. Plus one of the four decided to pick a fight with my best barista and haggle over the cost of a cup of coffee. So, I was ready to see them leave my establishment.

Am I in the business of loosing customers, NO. But, I am not going to let them 1. pick a fight w/my staff and 2. steal my product.

Rockcreekcoffee
 

manual_drip

New member
Oct 9, 2004
51
0
Pennsylvania
A local place uses their own stamp on the cards each time you get something. It might not be as foolproof as the cards you scan but it would probably be better than punch cards.
 

jeff

New member
Feb 8, 2006
5
0
Amarillo, TX
We also have a punch card system, currently it is after "7" punches get one free. We would eventually like to have a "10" for 1 system. I am curious any thoughts on whether one large jump to "10", or several small jumps would be the most appropriate. I see one large jump as bad, but then it is over. Several small jumps may come across as constantly trying to "squeeze" more out of our customers. Any opinions?
 

Coffee Guy

New member
Oct 19, 2003
874
0
Seattle,Washington USA
Hey Jeff:

Go for it. It is common place for us in Washington to do 10 punches and a free drink. Sure you may get a few raised eye brows at first, but customers will come around. If you need a reason to justify the increase, tell them the cost of everything is going up to you, and in order for you to keep their drink prices the same, you have to raise the limit of punches on your cards. 8)
 

Tartbird

New member
Dec 18, 2004
9
0
Jemiss,

Plasticards has a good loyalty gift program. It is better than punch cards because you don't have people easily tricking the system and it creates more loyalty. They prepay a certain amount on the card, you give them extra money on the card as incentive and then because they already PAID you, they come back and use the card and recharge the card. It works great! Even works better if you have a POS system.

Tartbird
 

cindy

New member
Feb 8, 2005
159
0
South Africa
try this.

choose the day of the week where youre not too busy and let your coupons or punch card thingys only be "claimable" on that specific day.

all the best mate...working with the public can be a pain in the neck.
they want good coffee but they hate paying for it.


:wink:
 

MontanaMama

New member
Mar 10, 2006
49
0
We don't do free refills on our logo cups........I still charge them the full 16oz price. Whats the incentive for the customers to buy the logo cup then? The coffee stays hotter for a longer period of time and they get a cute cup. The advantage is an obvious one for us......we still get the full price and don't have to use a disposable cup.
 

Rowley

New member
Mar 7, 2003
323
0
California
For more info... pickup April HBR (Harvard Business Review) They have a really great article regarding this...

Once I have some time i'll come back and divulge the key points I got out of the article for everyone.
 

morrisn

New member
Mar 27, 2006
126
0
Loyalty Cards

We had the loyalty cards, buy 9 get one free and found that the free was always a 20 oz Mocha even though they always drank brewed coffee. So we wnt to an inexpensive POS system. As the customers finished their cards we switched them to the POS, used their name and Phone number to track and set up all the products with points a $ 4.00 drink was worth 40 points and it took 400 points to redeem for that drink or 10 to 1. So the person who drinks brewed coffee may have to purchase 25 coffee's before he could redeem for the Mocha or he could get a free coffee after 10. It keeps the costs inline and does not allow customers to abuse you. The POS is very simple, when you have rung in the customers orser it has a pop up screen that comes up and tells you if the customer can redeem for the item and you can either pick the item or ignore it if the customer is saving his points. The system also gives you nice customer reports and you really know who your good customers are. We have over 1000 customers in the files. As for the conversion we told customers we were doing it for their benifit as too many of them were losing their cards
 

beefybean

New member
Sep 20, 2005
31
0
Austin, TX therabouts
The additional benefit of the loyalty card and POS is swipe fees. If your customers are using credit cards, you pay swipe fees and transaction costs each time. For 10 coffees, that's at least $1.00. If you are already providing the 11th drink free, that is a 9.5% discount. At $2.00 per cup, the swipe fee is another 5%. Now you are operating at a 15% discount. With a loyalty card, you put 5% back into your pocket. Add up your free coffees per month, multiply by the average credit card usage (50%?) then multiply by your swipe fee and you'll have your cash differential for a loyalty card program.

To be completely fair, you have to add in the cost of the card, $.50 - $1.00, but since they are reuseable, it will average out. Plus, people tend to spend more with loyalty/ gift cards. Plus, you can have them register it and you get customer data. Plus you can offer a replacement card for x amount in case they lose theirs. The service options go on and on, and all of it pays you back.
 

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