Loyalty scratch cards: Reward and retain your customers

It costs five times less to retain a customer than it does to attract a new one, so loyalty is king – or so they used to say. Back then, and even until very recently, business and all of its adages, universal truths, and unwritten rules were based on much older systems and ways of doing things.

The bigger thing to focus on today is customer lifetime value (CLV). It might make sense to go to the trouble of acquiring a new customer that will be more valuable to the business over the course of their lifetime than a so-so customer bringing in less than the average.

However, to maximise a customer’s CLV, you still need to make efforts to promote loyalty. So while the equation may have changed, the result is the same – loyalty is king, and you’d be missing a lot of tricks to not go after it.

How loyalty works

Loyalty is essentially an ongoing relationship where a customer continually opts for a business’s goods or services over their competitors. For example, a gamer consistently buying updated iterations of the Playstation over XBox or Nintendo, or a patron consistently ordering Pepsi over Coca Cola or other sodas.

Loyalty is generated in a number of ways:

• Having the best product or service: If what you do is just objectively the best thing on the market by a mile, loyalty will just happen because of results and word of mouth. This is called being undeniable.
• Positive interactions: Having the best customer experience or user experience with a brand also contributes to loyalty. For example, if you get opportunities to win with every purchase (such as with a scratch card), or if your eComm package comes in truly beautiful packaging that creates a positive unboxing experience.
• Trust: This is major. If all your review averages across review platforms are between four and five stars, people will go with what the consensus trusts. If they’re leaving you five star reviews, they will definitely come back to you.
• Rewards: Whether it’s points, regular instant win experiences like digital scratch cards, or buy five cups of coffee and get your sixth free, getting customers to buy into a rewards programme or loyalty programme really beds them in. It can be a win-win, but it also feeds into the sunk-cost fallacy – “I’ve invested so much in X’s loyalty programme, it’d be a mistake to go to Y” – a powerful psychological phenomenon.

What are “loyalty scratch cards?”

Loyalty scratch cards are precisely what they sound like – scratch cards, purposely customised to reward and engage customers, and typically in a digital format. They create excitement, offer a reward, and are universally understood.

Adding the prefix “loyalty” could almost have been unnecessary if not for the professionalisation of scratch cards back in the 1970s which led to them being more of a gambling and lottery staple – prior to which physical scratch offs were ubiquitous among North American grocery stores looking to reward their customers.

Why loyalty scratch cards are effective customer retention tools

The digital scratch card delivers on two of the four ways we discussed for generating loyalty.

They create a positive customer or client experience, because they represent the possibility of winning a prize or reward, and they can also slot into loyalty programmes to add value and interactivity.

As a gamification tool with a lot of scope for visual storytelling, they can be custom designed to get across key messages that positively reflect on your brand, in addition to the exciting possibility of winning a prize.

Scratch cards improve loyalty programmes and campaigns

Here are the three key ways scratch cards can be added to your customer retention strategy touch points.

Add value to the customer experience to create a positive impression

This could be done in a number of ways.

Think about restaurants where instant win experiences are available to either win your meal for free, or win a free dessert. The digital scratch card could be used in this way, scannable by a QR code, and with access protected by a unique code customers get with their receipt.

This could also be applied to a phygital retail campaign, where customers could win “perfect partner” accessories along with a select few bigger prizes to create excitement and engagement within a physical store.

While the digital scratch card game is very much an instant win, prize distribution mechanism, you could channel the user engagement to get across key messages – potentially pertaining to your corporate social responsibility (CSR) initiatives, which can also generate loyalty among more ethically-motivated shoppers.

Creating your scratch card on a gamification platform like Drimify, you can use intermediate content screens before or after your experience to tell these branded stories (while distributing rewards).

Increase customer lifetime value (CLV)

A great use case for using digital scratch offs for loyalty is by distributing promotional codes.

Again, building and customising your scratch card on Drimify, you can give away generic or unique codes that will give customers a special price, whether that’s a set amount off the regular price or unit price or a percentage – you can even set your Drimify-built scratch card games to award codes to every participant to really push conversions.

There’s obviously a balance here, to avoid devaluing your brand and impacting margin, but if customers know your rewards typically give them a special price for a limited time on the latest products within your speciality or niche, this is much better for CLV than heavy discounts down the line.

You can condition your audience to anticipate and better play with gamified marketing and use the increased time they spend inside your branded story to get across key messages that can also contribute to long term loyalty.

Gain customer insights and feedback with gamified data collection

The other great thing about digital scratch cards for businesses generating loyalty is that they’re a self-sharpening marketing tool. They collect their own data – both in terms of every user action generating a data point, but also in terms of collecting customer preferences and personal information.

Building scratch card games on Drimify, you can place your data collection form before or after the scratch experience, and fully define the info you require. In addition to the usual name and email address, you can ask your own questions to get customer preferences. For example, their favourite songs, their favourite colours, either through drop-downs or open form. This way, you can potentially personalise a prize or an experience, which can again play a huge factor in generating loyalty and maximising CLV.

Think about this. If you won an experience through a scratch card through one of your favourite brands, and it was perfectly tailored to your preferences, how would you feel about said brand? It’s the loyalty equivalent of the most thoughtful birthday present you can imagine.

Loyalty scratch card best practices

To really use scratch off experiences to maximise loyalty and CLV, you can’t just throw prizes and copy into the digital scratch card template and see what sticks.

There are best practices to follow to get the best results, based on the work of other businesses in the scratch card-loyalty oeuvre.

Align your rewards or prizes with customer preferences

As already discussed, every gamified scratch card you make on the Drimify gamification platform will generate data. You will be able to see how many people viewed the scratch card, how many people played it, and how many people completed it, and made it to your end screen.

Over time, you will see patterns, and you will be able to see what works best, in terms of configuration and prizes, with your audience.

If you see that promo codes for every player are delivering spikes in loyalty app usage and sales, more so than lesser quantities of bigger prizes, you know what to focus on prize-wise going forward.

If your product-based prize giveaways via the scratch off format are doing better than experience-based prize giveaways over the course of a year of campaigns, you know what to focus on to make next year’s campaign more successful.

If in doubt, ask: Because Drimify is a full-suite gamification platform, with scratch card functionality and instant win games, but also a host of other game mechanic types, you can literally ask your audience what they want.

You could include a question in your data collection form, or you could customise a survey and ask your customers directly what sort of prizes they like, as well as other key questions to help improve your future scratch card KPIs.

Create an engaging user experience

The scratch card is somewhat unique among instant win games in that it’s a very visual and direct user journey. You have your scratch area, or overlay, which reveals a win or lose visual, or underlay.

Really optimising the design of this reflects a lot on how your brand can be perceived, and you could even use it to tell a story or demonstrate your offering in its best light.

You should also consider in your testing phase – if using intermediate screens – if they work best in your UX before or after the scratch card.

Optimise your data collection form and ideal user journey

This is a huge element when it comes to getting the best possible KPIs for your scratch card.

People are suspicious and reluctant to give away their personal data, so data collection forms can be huge potential blockers, for scratch cards as much as anything else.

Only ask for information that you absolutely need, and if you require a postal address or an email address only for prize distribution, it might serve you to include a secondary data collection form at the end of the experience that is conditionally attached to a winning item.

How to get started with loyalty scratch card games

If everything you’ve read about digital scratch cards in this article sounds like it could help your loyalty strategy, create a free Drimify account today, experiment with the scratch card template, and enjoy a free trial to test it on your loyalty app and across integrations.

Efforts to generate customer loyalty are still a huge component of business success, even if the five times as expensive to get a new customer adage is somewhat out of date.

Scratch cards and gamified loyalty are a modern customer retention solution that taps into human psychology, and is highly versatile across industries and business functions.

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