Start your own: Card Loyalty Scheme

In the 1949 Ealing comedy Passport to Pimlico, residents of a bombed-out West London street discover an ancient parchment that states their area is legally part of an independent country called Burgundy.

Free from post-war government restrictions with their newly found sovereignty, the people of Burgundy create havoc as they discover they do not have to live under food rationing and state interference.

Greedy spivs and entrepreneurs flood the area looking for a financial killing but after falling out with the British government, the people of the new country are cut off from the rest of society, surrounded by barbed wire with their electricity and gas turned off and are left to fend for themselves.

Fast-forward to today and people in small towns across the country might feel similarly isolated and abandoned by the outside world. High streets have been hit as well-known retail chains such as Woolworths and Zavvi have shut up shop, while independent retailers, including butchers, often struggle against supermarket giants, which are safely nestled on the outskirts of town.

People in towns from Harwich to Gateshead are in the same predicament as the people of the fictional Burgundy with many feeling abandoned and let-down by both business and state. But where the situation differs to Pimlico in 1949 is that small towns today find that they are losing their identity following decades of supermarket expansion and consumer apathy.

Money matters

Lewes in East Sussex however is fighting back. In the days before the credit crunch, queues outside Northern Rock and quantitative easing, the idea of setting up a town currency, which is independent of Sterling, to help independent retailers would have sounded like a half-baked pipe-dream thought up in a pub on a Friday night.

Recession changed all that. Adapted from an idea thought up in March 2007 by a Totnes support group, business people in the town of Lewes decided to create their own currency to be used exclusively in independent high street shops. This meant people would shop more locally and, most importantly, buy more locally.

Despite the idea of a customer loyalty scheme being nothing new - supermarkets and some small shops have been doing them for years - they have now taken a different significance in today's turbulent finances and is something that butchers should seriously consider.

One firm that took the initiative and set up its own loyalty card in January was Lloyd Maunder which has stores in Devon and one in Cornwall. The business is more than 100 years old but it took until 2009 for it to start its first card scheme. "We wanted to show our customers how much we value their trade. We also wanted to actively encourage people to keep shopping on the high street and supporting local independent businesses through these tough economic times," says owner Andrew Maunder.

Customers pick up a loyalty card from the shop and a stamp is given for each transaction of 10 or more. Once 10 stamps are collected, the customer can then receive a 20% discount on their purchase, which makes it more likely that the customer will buy their meat from the local butcher rather than the nearby supermarket.

"As far as we know we're the only butchers in the area offering this kind of loyalty scheme, and customer response has been fantastic," adds Andrew. "Our prices for locally reared meats have always been competitive and customers can choose their cuts and quantities according to their budgets, but the loyalty scheme is a timely and obviously welcome icing on the cake or should I say crackling on the pork."

By May, Lloyd Maunder reckons there was a total of 543 discount loyalty cards in circulation where an estimated 1,068 minimum was saved in money for customers using the cards. The scheme also complements the store's Christmas Club stamps. Each stamp for this scheme costs 1 and customers receive two free stamps on their way to saving up to 50 towards their Christmas meat. "It's all about making shopping with us the smart choice. The loyalty scheme and the Christmas club together give a little something back, which means our customers are happy and so are we."

Flexible friend

There are many companies that offer loyalty card packages including TeleGiftCard and Telecard International. The obvious key advantage for using a loyalty card like TeleGiftCard is that they encourage customers to come back and spend more, but they can also be combined with a gift card scheme used on the same multi-purpose card. The company adds that cards also help build a customer database to use for more effective marketing. Also, in uncertain economic times, TeleGiftCard reckon it pays to give your customers that extra incentive to return to your store with money off and that you should structure your discounts so that your customers get more money off the more they come back to your store.

The company adds there are two main goals to setting up a loyalty scheme: providing incentives for your customers to return and building a quality database of your customers' details and spending habits. TeleGiftCard's Windows software is said to make both simple. Each time you swipe a loyalty card through your till, the software automatically calculates how many points to award.

The software can also be used to set-up customer incentives. For example, earn 1,000 points and get 10% off a purchase. When a customer uses their card as normal but has enough points for an incentive, the special offer is printed on their receipt. This entices them to visit your store again soon and make a large purchase to take advantage of the percentage off. The next time the customer comes into your store to make a purchase, they present the receipt or tell the sales assistant which offer they would like to use.

To get customers interested in signing up, a form can be provided for the customer to fill in when they request a loyalty card. The sales assistant just writes the card number on the form, or the customer's details can be taken at the point-of-sale and typed into the software directly. The software allows for as many details as you require to be stored about each customer. Then, each time a customer uses their card, the software records information about the amount of the sale and the date, allowing for tracking of the customer's spending habits.

The system then gives you access to your customers' details in list form or on a per-card basis, which can be used for mail-merging when you want to send out marketing to your customers.
Telecard International also offers a loyalty card service. Telecard's staff can help from artwork and design advice to technical support.

However, if you do no not want to go it alone, have a chat with nearby shopkeepers, the local council, nearby business organisations or even the local paper as many may be interested in taking part in a campaign to get people shopping locally. Just ask shoppers in Erewash, Derbyshire, or people in the Bassetlaw area of Nottinghamshire who have also seen loyalty card schemes set up in the local vicinity this year.

Introducing a local currency could be part of such a campaign. Brixton in South London is the latest area to introduce its own scheme after Totnes and Lewes. All three have been working closely with a global organisation called the Transition Town Network, which aims to make small communities more sustainable in the modern world.

Whatever option you are thinking of - creating your own card scheme or joining up with others to make your own currency - they will definitely make your business more sustainable than the ultimately doomed state of Burgundy.

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