5 ways mobile-based loyalty programs will grow your business

April 4, 2012

By Alan Chung, CEO of Perka

Spring is in the air. And just as the trees outside are starting to bud, now is a great time to reinvigorate your business's growth with loyalty marketing.

According to the NRA's 2012 Restaurant Industry Forecast, 57 percent of adult consumers are more likely to choose restaurants that offer loyalty rewards programs. And although you may have tried paper punch cards in the past, mobile-based programs are a totally different animal.

In addition, the latest research says customers prefer mobile programs over paper. And if that's not enough, here are five more reasons:

Aided customer recognition

You know her face, you may know what she orders, but you don't know her name. Unfortunately for many QSRs this is reality. Personal interaction can be business insurance during tough economic times and mobile-based loyalty applications make it possible. Some loyalty programs, including Perka's, has customers check into your establishment by name, not by scanning a code or handing over a generic punch card. As your loyal customers introduce themselves, your staff is able to put names to familiar faces and engage with your customers on a personal level. This connection will deepen a consumer's affinity for your brand and keep them coming back.

Data that proves your loyalty program works. Or not.

Punch cards are passé. You print them off, hand them out and collect those that manage to make their way through the system. But traditional rewards programs get lost or forgotten so you can't accurately gauge repeat visits and customer retention. Mobile platforms are different, because they provide you with an efficient way to track how well incentive offers work. Think about it. With more than 30 million consumers using mobile phones for shopping, social networking, Internet access and let's not forget making phone calls, you need to be where your customers are. Mobile apps increase the likelihood your customers remember to check into your loyalty program and all of their purchasing history can be electronically tracked for quick analysis of program success.

Repeat customers bring added revenue

On average, your business will lose 20 to 40 percent of its customers this year. And research shows it costs 10 times more to get a new customer in the door than it does to keep a current one. That is quite the predicament. The solution: by rewarding customer behavior, loyalty helps you keep the customers and revenue you already have. By eliminating just 5 percent of your customer attrition, you can improve your profits by 25 to 85 percent.

Cross-sell. Up-sell.

It's proven that customers are interested in more of your inventory than what they regularly buy. The challenge is to give them an incentive to go there. For example, JazzKats Coffee Bar in Portland, Ore., had offered paper punch cards for coffee purchases for years. When mobile-based loyalty programs launched last year, the business saw an opportunity to offer multiple rewards programs to increase sales of other menu items. Now, the coffee bar is seeing regular coffee drinkers return for lunch as well and the added sandwich sales (which average $3 to 4 more than coffee drinks) are significantly boosting the bottom line. The JazzKats case study demonstrates that mobile-based loyalty marketing can help grow your business by cross and up-selling your current customers.

Instant response to business needs

Mobile technology is an incredibly valuable tool for responding, instantly, to your businesses needs. Having a slow afternoon and want to generate sales? Need to clear out that excess inventory ASAP? Mobile-based loyalty programs allow you to connect with your customers anytime via SMS (text) messaging so you can send instant incentives. It's a great way to stimulate sales when you need it most and unlike paper punch cards, mobile platforms enable you to reach your customers even when they aren't in your shop.

Mobile-based loyalty is a prime example of how you can leverage the power of technology to rejuvenate your business. Not only are you able to connect with customers easily and thank them for their patronage, but your business will reap business and financial benefits as well.

Alan Chung is CEO of Perka, a smart loyalty program that helps small merchants and their regular customers support one another. The company's system recognizes customers through increasing tiers of "perks," and in turn provides real, meaningful intelligence to merchants. Perka is based in Portland, Ore., and New York City.

Topics: Business Strategy and Profitability , Customer Service / Experience , Marketing / Branding / Promotion , Online / Mobile / Social , Operations Management

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