Is a loyalty card worth it for a small coffee shop?

What does the research say?

That not all guests react the same way. Yuping Liu studied a convenience store chain's loyalty programme over time, so this isn't about cafés. According to the author's summary, heavy buyers were the most likely to claim rewards, and their spending didn't rise. Moderate buyers gradually bought more, mostly within the first three months. Light buyers also changed their behaviour noticeably.

The campus café study in the Chicago Booth Review fits this: people who sped up faster towards the first reward were more likely to return and earn a second. That measures people who already held a card, though, not new customers.

When does it pay off?

When each full card brings in more visits than the reward costs. Here's the sum for the made-up Café Morgenrot, with a 4 euro coffee and 80 cents in ingredients:

So a ten-stamp card needs one or two extra visits. That's realistic for someone who otherwise comes every other week. For someone who's there every morning, nothing gets added, and you're giving away 40 cents a cup on paper. That can still be right, as a thank you. Just don't count on extra sales.

When should you skip it?

• If nearly all your guests come daily, or nearly all are tourists.
• If your margin can't take a discount of about 10 percent.
• If you're hoping to win new customers. A card works on people who've already been. For new guests, Google reviews do more.
• If your team forgets to stamp when it's busy, and the card ends up annoying people.

Paper or digital?

Paper is enough to start with if you just want to test. The drawback is that you can't see who comes back, and that's the one question that decides everything. If you test a digital card, pick one guests don't need an app for, or you'll be measuring the hurdle rather than loyalty. For what a regular is worth to you, read what is a regular worth?.

How do you see whether the card works for you?

With a card that counts for you. With the NFCeez stamp card it works like this: guests sign up on your Smart Page with a code sent by email and add the card to Apple Wallet or Google Wallet, and your team stamps by scan in the app. The app shows your members' return rate, how many came at least twice and how many are close to a reward. That's exactly what the sum above needs. The limit: it only counts members, and no app can tell you whether they'd have come just as often without a card. The digital stamp card page shows what it looks like.

Your next step: test a card for three months, write down your monthly guest numbers first, and compare afterwards. If nothing moved, stop.