The use of traditional and digital customer cards in retail, system catering and tourism
Authors: Prof. Dr. Hans-Christian Riekhof and Stefan Brinkhoff (M.Sc.)
What is the future of traditional and digital customer cards in retail, system catering and tourism? Are companies exploiting the possibilities of new technologies? These questions are addressed in the new study by PFH Private University of Göttingen.
The scientists of the study were interested in how companies from the mentioned sectors think about a digital customer card, which is available as an app on the smartphone, what benefits they attribute to such a customer card and what its distribution looks like. And whether companies rather rely on their own, company-specific customer card, or whether they prefer cross-company cards (e.g. payback or Deutschlandcard).
“The plastic customer card in the customer’s wallet has no future. We will experience a very rapid transition to digital customer cards. The customer card as an app will enable an individualized and above all location-based dialogue.”
– Stefan Brinkhoff (M. Sc.)
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The future of customer cards…
Agenda
- Study topic
- The spread of customer cards
- Benefits and tasks of customer cards
- Company-specific or cross-company customer cards?
- The companies surveyed
- Conclusion
1. The topic of the study
“Relevance is the new currency in marketing communication.
And relevance is not created by bombarding your customers with massive, undifferentiated messages at the wrong place and at the wrong time.”
– Prof. Dr. Hans-Christian Riekhof
The topic: classic and digital customer cards
- Customer loyalty plays a central role for every company – regardless of the industry. It is an old wisdom that it is significantly more expensive to acquire a new customer than to retain an existing customer and reduce the churn rate by just a few percentage points.
- Many companies use customer cards as a valuable and practical tool
for customer loyalty. This offers the customer a high added value through individualized communication and incentive programs, so that their acceptance is usually very good, especially among the best customers. - In return, the company opens up a new, individualizable communication channel to the customer. Important insights into actual customer behavior can be gained. Under the keyword Location Based Marketing, digital campaigns can be played out location-based directly at the shelf; this demonstrably increases the relevance of the messages.
- In addition, customer cards are characterized as a marketing instrument that allows an immediate success consideration and economic evaluation of each individual action and campaign.
The perspective in the age of mobile marketing: Digital customer card
- At the same time, as with many traditional communication channels, a certain saturation occurs: wallets and purses are overflowing with plastic cards, and in case of doubt, the required customer card is not at hand when shopping.
- Against this background, we are interested in this study in how companies from the aforementioned sectors think about a digital customer card, which is available, for example, as an app on the smartphone, what benefits they attribute to such a digital customer card and what the distribution of these digital customer cards looks like.
- Furthermore, we are investigating whether companies prefer their own, company-specific customer card, or whether they prefer cross-company cards (such as Payback or Deutschlandcard).
How many customer cards do you actually have with you?
The topic: classic and digital customer cards
“The plastic customer card in the customer’s wallet has no future.
We will experience a very rapid transition to digital customer cards. The customer card as an app will enable an individualized and above all location-based dialogue.”
– Stefan Brinkhoff (M. Sc.)
Notes on the conduct of the study
- The present study was conducted by the International Marketing department of the PFH Private University of Göttingen (Prof. Dr. Hans-Christian Riekhof and Stefan Brinkhoff (M.Sc.)) in the period from 22.09.2017 to 15.11.2017.
- 196 experts in companies were asked to participate in an online survey that aims at the use and also the comparison of traditional and digital customer cards in companies. A total of 107 answers could be included in the evaluation.
- This study cannot and does not want to claim representativeness. Nevertheless, it can be assumed that the results have a fairly good reliability and meaningfulness due to the number of participating companies.
The results at a glance: Companies are already implementing digital customer cards, and they find them quite useful.
- 85% of the companies surveyed generally consider a customer card to be very useful or useful.
- More than ¾ of the companies surveyed also consider a digital customer card (for example as an app) to be very useful or useful, and almost 40% of the companies surveyed already have a digital customer card
- Only in retail is the customer card sufficiently anchored or widespread in the customer base. In system catering and in the field of tourism and mobility, the distribution in the customer base is simply still insufficient.
- Customer loyalty and the gaining of insights into customer behavior are the two most important objectives pursued with customer cards.
- The greatest benefit of a company-specific customer card is, among other things, improved customer loyalty, greater flexibility in the implementation of campaigns and actions, and the exclusive use of customer data.
Agenda
- Topic of the study
- The spread of customer cards
- Benefits and tasks of customer cards
- Company-specific or cross-company customer cards?
- The companies surveyed
- Conclusion
Does your company basically use a customer card (both digital and analog)
Customer cards generally have a good market penetration – but there is still room for improvement.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Is your company planning a customer card?
Relatively few companies are planning a customer card.
n = 37 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Does your company use a digital customer card?
Almost 40% of the companies surveyed use digital customer cards.
n = 37 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Is your company planning a digital customer card?
16% of the companies surveyed are planning a digital customer card.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Agenda
- Study topic
- The spread of customer cards
- Benefits and tasks of customer cards
- Company-specific or cross-company customer cards?
- The companies surveyed
- Conclusion
Do you generally consider a customer card to be useful?
Not surprisingly, customer cards are considered quite useful in all industries considered.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Do you generally consider a digital customer card to be useful?
Remarkable: About ¾ of the respondents also consider a DIGITAL customer card to be useful.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Digital customer cards reach the consumer location-based directly in front of or in the store
Customer loyalty is the main argument for customer cards. Customer Insights in second place.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
What is the percentage of your customers who own a general customer card?
Only in retail is the customer card sufficiently widespread in its own customer base. Large gaps in tourism and system catering.
n = 70 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
What is the percentage of your customers who own a digital customer card?
Even in the case of the digital customer card, the trade is leading in terms of the penetration of the customer base.
n = 42 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
The penetration of the customer base with the customer card is a critical success factor
“Companies should persistently and consistently work to ensure that the majority of customers actively use the customer card.
Fortunately, it is usually the regular customers and the most loyal customers of a company who are the first to embrace customer cards (including the digital version). That’s why the leverage is so great.”
– Prof. Dr. Hans-Christian Riekhof
Customer cards provide customer insights…
The possible functions of a customer card
“The possibilities of a digital customer card are extremely diverse. However, one should carefully consider which functions the customer actually values.”
– Stefan Brinkhoff (M. Sc.)
Not all possible functions of a customer card are relevant for every company
“The fact that in our study the instore navigation as a customer card function does not yet have an outstanding importance is obvious.
Instore navigation is only of great benefit to the customer if it involves complex assortments in large areas (for example, DIY stores or self-service department stores). But then it can greatly relieve the staff and lead to significant cross selling effects.”
– Prof. Dr. Hans-Christian Riekhof
Coupons and special offers are at the top of the list of customer card features.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Agenda
- Study topic
- The spread of customer cards
- Benefits and tasks of customer cards
- Company-specific or cross-company customer cards?
- The companies surveyed
- Conclusion
Company-specific customer card compared to the cross-company customer card
“Cross-company customer cards appear advantageous for some companies at first glance.
However, the responsible marketing managers should ask themselves whether they really want to share their customer data with other companies – or whether they prefer to use their insights exclusively.”
– Prof. Dr. Hans-Christian Riekhof
Which card model do you prefer?
Company-specific customer cards are clearly preferred over cross-company customer cards (such as Pay-back or Deutschlandcard).
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
What do you see as the greatest benefit of a company-specific customer card (very great benefit / great benefit)?
There are good reasons for company-specific customer cards. Customer loyalty and flexibility in campaigns are the core arguments.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
The cost argument for customer cards could play a not insignificant role in the future
“Companies should carefully examine whether cross-company customer cards are the best solution from a cost perspective.
63% of the companies surveyed in our study already see lower costs with their own customer cards today. And the costs will continue to decrease if you rely on digital customer cards.”
– Prof. Dr. Hans-Christian Riekhof
Efficient targeting through own customer card systems could gain in importance
“50% of companies see more efficient targeting as an advantage of company-specific customer cards.
Perhaps this advantage is even underestimated. Because where else can you control campaigns based on CRM data, complete purchase history and location information?”
– Stefan Brinkhoff (M. Sc.)
Agenda
- Topic of the study
- The spread of customer cards
- Benefits and tasks of customer cards
- Company-specific or cross-company customer cards?
- The companies surveyed
- Conclusion
What is your average number of employees worldwide?
The number of employees worldwide in 2016 is largely similar: mainly large companies shape the results.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Which industry does your company belong to?
Trade forms the focus of our survey with 58% of the responses.
n = 107 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
In which area are you active in your company?
The majority of responses come from management and sales.
n = 106 │ Authors: Prof. Dr. Hans-Christian Riekhof, Stefan Brinkhoff © 2018 All rights reserved.
Agenda
- Topic of the study
- The spread of customer cards
- Benefits and tasks of customer cards
- Company-specific or cross-company customer cards?
- The companies surveyed
- Conclusion
The conclusion of the study
“The basic potential of digital customer cards has been recognized by the majority of the companies surveyed.
The far-reaching new functionalities of digital customer cards such as instore navigation and location based couponing directly at the shelf are only seen by a part of the respondents.”
– Prof. Dr. Hans-Christian Riekhof
