Michael Bahr: Let’s Build Some Loyalty!

January 21, 2019 | 3 min to read

Last April, I mentioned that loyalty programs can sometimes cause difficulty for game stores. I myself avoided implementing a real loyalty program for a long time because of those very difficulties.

But after the success of the program at my store—"DSG Stars"—I wish I had started sooner. DSG Stars was probably my most successful deliverable of 2018, and it’s humming right along in the new year.

The key is to keep it light, simple, and limited. Here are a few pointers that should help:

 

Let the software do the work.

 

Experienced retailers will recount the time they handed out a box of punch cards, then spent the next half-decade. . .redeeming punch cards. You'll want to find software that does the heavy lifting—one that absolutely, positively records every redemption.

Some loyalty programs come integrated into your point-of-sale system, like Square Loyalty, which I use. Others work the same way—like Quickbooks Pro POS Digital Loyalty Rewards, or the Clover Loyalty app. There are plenty of independent options, too.

The value these provide is that rewards are tracked, often with visibility on the customer’s end, without you having to do anything. Not only does that save you a ton of work, but it helps keep customers from double-dipping or freerolling on you. (It also curtails opportunities for employee fraud.)

And best of all, you can measure whether it’s working by running the software’s attributable sales report.

 

Keep credit earnings simple and countable.

 

Typical loyalty programs offer earnable credits—“points” or “stars” or whatever your system lets you name it.

The default is to award a point/star for every increment of N dollars spent. That’s what I use. I set the threshold two cents under so that it catches X.99 prices. I am not going to punish a customer for spending money with me by leaving them one inch short of a first down.

Many loyalty programs let you award bonus stars if the recipient provides an email address or mobile number, which makes it more difficult for them to use “burner” contacts. I recommend using these options because they are crucial to campaign implementation. More on that in a moment.

I also recommend configuring your point-of-sale system to deduct store credit used from the price of an item, where possible. You want only real money spent to earn points/stars.

 

Keep redemptions simple and finite.

 

The goal is to craft the reward so that no matter how it scales up, your exposure remains low.

I made a blanket option for 10% off anything, which customers can earn with ten stars. There is virtually no way I can lose in this scenario, even though the discount stacks with internal discounts, because it’s all real money.

Once you have your default redemption and you’ve made sure it scales safely, you can add specialized redemptions. I let players turn in a smaller number of stars for free entry into any constructed Magic event, and a somewhat greater number of stars for free entry into any Booster Draft.

Since that entry fee is for an event and the output faucet is prizing, there’s a built-in buffer making sure that the redemption won’t “cost” you more than your regular organized play margin (which you calculated back when you read this article).

 

Use the information you paid for.

 

 

So, at this point you're awarding credits/points/stars to your customers when they spend money, and they're earning a couple extra stars for giving you contact info. What do you do with it?

The software you use will typically allow you to run marketing campaigns with that information, and it’s tied to the subscription price you pay.*

Basically, you pick an audience (example: "all customers who've made a D&D purchase in the past 60 days"), and send them all a reward incentive. There are two “best” reward incentives that I have found for these.

First, “bounceback coupons.” These offer some reward customers for coming back after a hiatus. They get a message like, “We miss you! Come back for a special offer!” with a one-time code for a reward.

Second, themed coupons. So that's things like, “Celebrate Halloween with a free snack and beverage when you play in any event from October 25–31!”

But don’t limit yourself to those types of offers. How about coupon codes for clearance of a product line? Or as a tool for managing early-bird preorders? So much potential here.

 

Now then. . .

 

These days, I wouldn’t want to be without a loyalty rewards program. Once your audience understands that their dollars go further with you than with the competition, the payoff can be magnificent.

Michael Bahr is the managing partner of Desert Sky Games in Chandler, Arizona. He served four years as a Level 3 Judge, holds a law degree from Arizona State, and spent seven years in government health care administration. Michael’s Ravnica guild is Golgari: black for capitalism and green for sustainability, both economic and environmental.

 

* Remember, emails must always comply with your local laws regarding email marketing such as the CAN-SPAM Act in the United States.