Prepaid cards have higher purchase frequency and improved retention rates
Customer loyalty is crucial for sustainable growth in today’s competitive convenience retail market and retailers need effective strategies to attract new customers and cultivate lasting relationships.
One compelling example is 7-Eleven Denmark’s successful implementation of prepaid cards within its loyalty program. This strategy has proven to be an effective means of boosting user engagement and retention, paving the way for converting customers into valuable subscription or loyalty members.
The Foundation: Digital Stamp Cards and the Quest for Customer Lock-In
7-Eleven Denmark, a leading convenience retailer with more than 175 stores operated by the Reitan Group, understands the importance of building a robust loyalty program. Digital stamp cards and points programs serve as foundational loyalty mechanics, offering customers clear incentives for repeat purchases. These programs have a broad appeal because of their simplicity and low barrier to entry.
7-Eleven Denmark also strategically supplements its stamp card program with prepaid cards. This combined approach provides enhanced lock-in effects in exchange for more significant discounts.
Prepaid Cards: Enhancing Customer Value and Lock-In Effects
Prepaid cards offer a compelling value proposition. Customers pay upfront for a set number of items, like five cups of coffee, at a discounted rate. This upfront payment creates a stronger commitment and improves cash flow for the retailer.
7-Eleven Denmark’s prepaid card program allows customers to purchase five coffees for a fixed price. Once activated, the card can be redeemed for coffee, offering a cost-saving compared to individual purchases. After the card is used, customers have the option to purchase a new one.
Prepaid Cards: A Gateway to Subscriptions and Enhanced Loyalty
Liquid Barcodes recognizes that digital prepaid cards offer a seamless, contactless experience and a great starting point for subscription programs. 7-Eleven Denmark strategically uses prepaid cards as a stepping stone to encourage customers to transition to a subscription model.
For customers hesitant to commit to a subscription, prepaid cards offer a low-risk opportunity to test the benefits. By offering similar advantages through a prepaid card valid for one month, retailers can demonstrate the convenience and value of recurring purchases. After experiencing the benefits of a prepaid card, customers are more likely to convert to a monthly subscription program. Retailers can further incentivize this transition by offering a lower rate for subscriptions with auto-renewal. This approach builds customer loyalty and secures recurring revenue.
About Liquid Barcodes
Liquid Barcodes is the leading loyalty platform for convenience retailers. Unlike other solutions, ours has been designed from the ground up to retain member engagement and activity. Every aspect, from the fundamental system architecture to the small details that make our loyalty apps such a joy to use, is crafted to ensure a highly personalized, gamified experience.
Our loyalty programs are so engaging and visually appealing that members remain active over time, making us better than any other solution at retaining your members’ attention. Increased attention translates into increased impact. Ultimately, these differences will make your loyalty program a more powerful and effective tool when you work on increasing basket size and visit frequency.
Learn more about Liquid Barcodes at liquidbarcodes.com.
About the Author
Carolyn Schnare, Chief Content Officer, Liquid Barcodes
Carolyn Schnare has been involved with the convenience retailing industry for two decades, with extensive knowledge of customer engagement and marketing, sustainability, and community outreach. Before Liquid Barcodes, Schnare worked at NACS (National Association of Convenience Stores) in a variety of roles from event production to membership and most recently as Director of Strategic Initiatives and host and producer of the popular industry podcast, Convenience Matters. Schnare currently anchors the popular Future of Convenience podcast, produced by Global Convenience Store Focus media group.
