Digital V Plastic
A Cost Analysis for Businesses
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In today’s digital age, businesses are continuously exploring ways to reduce costs while improving customer engagement. One such solution is the shift from plastic cards to digital cards. While the upfront cost of a plastic card might seem lower, there are hidden expenses that can add up over time. In this post, we’ll dive into a cost comparison between plastic cards and digital cards, focusing on SMS marketing costs and the benefits of free push notifications, using an example of 10,000 cards.
Upfront Costs: Plastic Cards vs Digital Cards
Let’s first look at the basic costs involved:
• Plastic Cards: On average, a plastic card costs around $0.26 per card to produce.
• Digital Cards: A digital card, on the other hand, typically costs $1.13 per year per user/per year. This covers the card itself, ongoing maintenance, features and updates.
At first glance, the plastic card seems to be the more economical choice, but it’s important to take into account the additional marketing and communication costs associated with each option.
Hidden Costs: SMS Marketing
When you hand out plastic cards, you’ll likely need to use SMS marketing to keep your customers informed, engaged, and up to date. SMS campaigns can cost around $0.05–$0.10 per message, depending on the provider and the volume of messages sent.
Let’s say you’re sending monthly SMS updates to 10,000 cardholders. The total cost for SMS marketing over the course of a year would range from $600–$1,200, just for one message per month. This doesn’t even factor in the costs for additional marketing messages, promotional campaigns, or customer support via SMS.
Now, let’s compare this with the cost of a digital card. With a digital card, businesses can send free push notifications directly to users. These notifications can be personalised, instant, and tailored to specific segments of your customer base, all without incurring extra costs per message. This means that businesses can engage with customers in real-time without worrying about additional SMS charges, making digital cards a much more cost-effective option in the long run.
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When you factor in the cost of the digital card at $1.13, and you send one push notification per month (12 per year), the cost per message is just $0.10 – roughly the same as 1-2 text messages. However, included in that price is access to all of DigiPass’s powerful digital card features. This means you’re not only getting cost-effectiveness, but also the benefits of our CRM, unlimited card updates, enhanced security, and the convenience, flexibility, and scalability that digital cards provide
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Email Marketing
Email open rates generally range from 15% to 25%, though they can be as low as 1-5% depending on factors like spam filters, crowded inboxes, and email relevance. This means a significant portion of emails may go unread.
In contrast, push notifications typically have much higher open rates, often around 90% or more. Push notifications are delivered directly to users’ devices and are harder to ignore, making them a more effective and immediate form of communication compared to email. A push notification is not mistaken for spam, as it is delivered directly to your customer’s phone with your business logo, providing a clear identifier of your brand.
Ongoing Communication and Engagement
Plastic cards limit the ways businesses can stay in touch with users. While you can send SMS or physical mail updates, these methods require additional resources and ongoing costs, especially as your customer base grows. Moreover, the engagement rate for SMS and mail can be inconsistent, with users potentially missing messages or not interacting with them as frequently.
With digital cards, businesses have the advantage of sending real-time push notifications that can be personalised and segmented based on user behaviour. Push notifications are instant and effective, resulting in higher engagement and increased customer retention. And the best part? These notifications come at no extra cost.
The True Cost of Plastic Cards Over Time
While plastic cards may seem like the cheaper option at $0.26 per card, the long-term costs for SMS marketing, printing, shipping, and maintaining physical card inventory can quickly escalate. Businesses must also account for the time and resources spent managing card replacements, reprints, and customer service issues related to lost or damaged cards.
In comparison, the $1.13 per year for a digital card covers not only the card’s maintenance and updates but also provides access to unlimited push notifications. This reduces the need for expensive SMS campaigns and physical marketing efforts, making the digital card a more cost-effective and efficient solution over time.
The Bottom Line: Is the Extra .87¢ Worth It?
When you consider the added costs of SMS marketing, printing, shipping, and other marketing strategies, digital cards are a clear winner for businesses looking to save money while improving customer engagement. The ability to send free push notifications directly to your users gives you a competitive edge by allowing you to stay in touch in real-time, without incurring extra charges. Plus, with digital cards, you’re reducing your environmental footprint by eliminating the need for plastic cards, shipping, and other resources.
Over time, the small price difference of .87¢ per user per year will likely be far outweighed by the savings in marketing costs and the increased efficiency of managing your digital card system.
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​In conclusion, while plastic cards may seem like a low-cost option, the hidden costs of SMS marketing and ongoing communication quickly add up. Digital cards offer a more sustainable, cost-effective, and engaging solution, making them the ideal choice for businesses looking to future-proof their card services and improve their customer engagement without breaking the bank.