Today, we introduced a powerful new tool for businesses – the Gift Punchh: a stamp or punchh awarded by a business to its customer as a gift.
Why is this important? Allow me to illustrate with a real story (source: Switch by Chip and Dan Heath):
A local car wash ran a promotion featuring loyalty cards. Every time customers bought a car wash, they got a stamp on their cards, and when they filled up their cards with 8 stamps, they got a free wash.
"Switch" by Chip & Dan Heath
Another set of customers at the same car wash got a slightly different loyalty card. They needed to collect 10 stamps rather than 8 to get a free car wash – but they were given a “head start.” When they received their cards, 2 stamps had already been added.
The “goal” was the same for both sets of customers: buy 8 additional car washes, get a reward. But the psychology was different: in one case you’re 20% of the way toward a goal, and in the other case, you’re starting from scratch. A few months later, only 19% of the 8-stamp customers had earned a free car wash, versus 34% of the head-start group. (And the head-start group earned their free car wash faster.)
What this data demonstrates is that the psychology of a loyalty program is just as important as the program itself. We’ve always advocated several ‘best practices’ in the design of a loyalty program (in fact, we have a whole article coming up about this very topic – stay tuned for that) – but this new feature – the gift punchh – is a tactical and quick way to increase customer engagement and excitement.
Here are some examples of how you can use the new Gift Punchh:
1. Automatic Gift to Start the Program
You can design your Punchh program to automatically start off with 1 pre-filled gift Punchh hole to give your customers a head-start. The results will follow – as seen from the car wash example above.
2. Gift because you love your most loyal customers
You can identify your most loyal customers through the “Visitors” view of your Punchh dashboard. You can then reward your top 1, 5, 10 or 20 most loyal customers with extra punchhs just because you love them and are appreciative of their business – these extra, free punchh’s are accompanied with personal notes of thanks from you so they know why they are being rewarded.
3. Gift for positive comments or for referrals
You can also use the Gift Punchh as a tool for giving thanks – if a customer refers many friends (which we track through Punchh) or if he/she leaves a very positive review (customers can leave reviews at the end of the punchh process – these reviews can then be shared, with your customers permission, with others if you like. Have a look here: http://punchh.com/b/98.), then you can reward them with a personalized email and a gift punchh (or punchhs – you can award as many as you like)…
4. Gift to compensate for a negative experience
Similarly, you can gift a punchh to those customers who’ve had a negative experience at your restaurant – to help fix their experience and coax them to give you another chance.
This new mechanism is just another tool we provide to you with the Punchh platform to increase customer engagement and to keep them happy and excited about your restaurant.