Last week's NRA show proved that the mobile loyalty space is getting crowded; 48 loyalty solution providers exhibited — quite an increase from the 36 that were there last year. FastCasual.com chatted with two of them — Front Flip and Punchh — about why restaurant owners should choose their platforms to host their loyalty programs. We also heard from Leaf, which is a mobile POS provider that partners with mobile loyalty platforms to offer customers mobile payments and loyalty options. They each explained why mobile marketing is so important and where the trend will go from here.
More than 2,000 businesses are using FrontFlip to host their loyalty platforms, and more than 600,000 customers have downloaded the app that allows them to scan QR codes posted inside participating restaurants to win instant prizes.
|FrontFlip now "wraps" its gifts in branded paper and
recently launched automated gifting.
The company recently released Automation Gifting, digital gifts that are sent to those with the Front Flip app. Users get a push notification whenever the gift arrives. For example, customers receive gifts the day after they join the platform and also on holidays and birthdays or after 30, 90 and 120 days of no visits. Lastly, the platform tracks demographics and customer participation.
Founder Sean Beckner weighed in on the importance of developing a mobile loyalty program.
Q: Why is it a necessity for restaurants to have a mobile loyalty program?
Beckner: Consumers are increasingly using their mobile devices to make dining decisions, and competition for "phone share" is fierce. According to a recent survey by Chadwick Martin Bailey, 81 percent of consumers have searched for a restaurant on a mobile app in the last six months.
To stand out, restaurants need more than a static mobile listing or online menu. They need to truly engage customers on their mobile devices in a way that holds their attention and drives them in-store.
When restaurants have real engagement, that's when they'll see visit frequency and transactions spike.
Q. Is there space for all the mobile loyalty companies out now? If not, how should restaurants make their selection to ensure that they don't go with a platform that will die off?
Beckner: It was exciting to hear all the buzz about the loyalty space at the NRA. This year the question wasn't, "Are you looking for a loyalty program" but "Which one?"
The loyalty platforms that come out ahead will succeed in growing a restaurant's loyal customer base. It's not just about giving discounts to regulars who already visit frequently. Loyalty is about capturing and engaging all kinds of people, including new customers and casual visitors, and giving them a great reason to come back again and again.
We also believe an indication of a loyalty providers' stability is their client portfolio. Do they have a strong blend of local, regional and national businesses that trust them as their loyalty provider of choice? And last but not least, is the company transparent? Can they provide data from real clients to show how they are helping grow sales and visit frequency? These are important considerations for any restaurant looking for a long-term loyalty partner.
Punchh, which serves only restaurants, has more than 1,000 locations using the platform and is expecting to double that within a few months, said Jitendra Gupta, CEO. Using Punchh's cloud-based program, restaurants can create a personalized app that
|VooDoo BBQ uses Punchh for mobile marketing.
rewards patrons with points for purchases and referrals. It can be integrated into the customer's existing POS system to allow restaurant users to "punch" their own cards when dining or referring friends. The system also tracks purchasing data and social media activity generated through the Punchh platform. Gupta explained why mobile loyalty is a necessity.
Q. Why is it a necessity for restaurants to have a mobile loyalty program?
Gupta: Millenials live on their smartphones. They expect to have one-to-one, personalized interactions with restaurants right from their phones. Millennials also are much more vocal about their experiences and often refer their friends. Engaging millennials using mobile loyalty and marketing programs is not an option, but a must-have solution for restaurants. To get the most from customer relationships, a mobile loyalty program should allow restaurants to reward customers for repeat visits, enable word of mouth, and reward customers for referring their friends. So a mobile loyalty program not only brings customers back, but it is also a great way to acquire new customers.
Mobile loyalty programs are a lot easier to deploy, and get much better results than traditional paper or swipe card-based programs because customers often forget to carry these cards. With Punchh-enabled mobile loyalty, restaurants see at least two to four times adoption rates and repeat usage rates, 10 times more reviews than Yelp and a 7 to 10 percent increase in sales.
Is there space for all of these companies? If not, how should restaurants make their selection to ensure that they don't go with a platform that will die off?
Gupta: To make sure restaurants select a vendor that has a proven track record of building a great product and delivering measurable results, restaurants need to focus on the following:
- Focus on value: While it is easy to create and launch a simple rewards program, it is hard to build a program that delivers measurable results. While most vendors focus on driving repeat visits, it's not often clear whether the program is driving visits or if the customers would have come anyhow. We believe that the true value of loyal customers is not only that they visit often, but that they drive word of mouth and refer their friends. We believe that a loyalty program that rewards repeat visits, makes it easy to spread the word of mouth and rewards referrals will drive significant results and return on investment (ROI). Total Value = Value from Repeat Visits + Value of Referrals + Value of Social Content.
- Think long term: Mobile has quickly become an important channel for restaurants to engage their customers, and restaurants need to own this channel with an app that provides the entry point for all mobile interactions. Restaurants need to select a solution that not only protects their existing investments but also provides them with flexibility to add new capabilities with time. They need to pick a platform that enables them to easily add other mobile capabilities, such as online ordering or payments or wait-list management all within a single mobile app.
- Focus on data: To build and grow one-to-one, personalized relationships that millennials expect, restaurants need to understand them and own their data along with the channel to communicate with them. A good mobile loyalty program should provide detailed insights on each consumer, including demographics and social information via social networks, visits, spend, orders and SKU-level data via turnkey POS integration and reviews via the app by simply asking the customers. It should also allow restaurants to own their data and to act upon all this data with campaigns that make the right offer to the right customer at the right location and at the right time.
Leaf, which has a few hundred merchants in the Boston area and expects a few thousand nationwide by the end of 2013, is an open platform that allows for loyalty apps to run within it.
Its main function is as a point-of-sale device but it also delivers business intelligence. It runs on the LeafPresenter, a tablet built specifically for point-of-sale, said Alex Mackenzie, Leaf's director of sales, who discussed where he thinks the trend of mobile loyalty is headed.
Q: Do you think Leaf has an advantage since you have a payments option, too?
Mackenzie: Up until now we have been very focused on optimizing the merchants experience, and we would like to partner with outside developers that are already building great loyalty apps. In the beginning, we had this thought that we could boil the ocean and do it all, but over time we realized that it is much better to allow integration to exist, so that we give the merchant the ability to pick their provider. A great example of a powerful integration is between Leaf and LevelUp, where you pay with your phone which also has a loyalty component that rewards you when you reach a certain level of purchases.
Q: Why is it a necessity for restaurants to have a mobile loyalty program?
Mackenzie: In today's world, customers are constantly on their mobile devices. If you are not engaging your customers via mobile it is a missed opportunity. Whenever I am looking for a place to eat the first thing I do is pull up Google or LevelUp. Even if the restaurant I am looking for is not on there, it is a good chance I will settle for something else that pops up. Innovation within this space really accelerated with the daily deals companies but customers have always wanted savings and rewards since the beginning of trade. At the end of the day it is all about data and the ability to use that data to make decisions and run promotions in real-time.
|Mobile loyalty platforms can be intergrated into Leaf
The company that will conquer mobile loyalty is the one that will turn it in to the most user-friendly game with the greatest rewards. If you can involve social media and make it simple, the product will grow organically.
Q: Is there space for all the mobile loyalty companies out now? If not, how should restaurants make their selection to ensure that they don't go with a platform that will die off?
Mackenzie: I speak with a lot of companies that are jumping head first in the loyalty space, and it is still at the point where there is no one clear winner. It seems that every other week you hear about a loyalty app receiving funding. Brick-and-mortar loyalty started back in the day with punch cards, and now you have companies like Belly and Front Flip that are utilizing mobile technology. It's clearly transforming based on a need for a better system for both merchants and customers.
For the merchant, they want the loyalty to happen without any barriers, so even pulling something out of their pocket can slow the process down. For the customer, they are focused on getting rewarded well and having a good user experience. I think there is a lot of room for success in this space because it is very difficult for one company to conquer all the different verticals. There are quite a few funded startups within loyalty space, and I cannot say that there is one that really had it figured out.
What do you think? What marketing mobile platform has the most potential? Leave your comment below.
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Cherryh Butler has been a reporter for nearly 10 years, writing on a variety of topics ranging from the restaurant industry to business and health and fitness news. Before joining FastCasual.com as editor, she oversaw KioskMarketplace.com and PizzaMarketplace.com and contributed to RetailCustomerExperience.com. She's also written for several daily newspapers, magazines and websites, including The Kansas City Star and American Fitness magazine.