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Spring 2013
Perks Get Personal

For not much money, specialty retailers can now get in to loyalty marketing like the big boxes already have.

Not very long ago, one couldn’t purchase anything without being offered a rewards card. From plastic to paper punch cards, wallets were splitting at the seams with promises of discounts everywhere from mass retailers to corner cafes. However, traditional programs like these neglected one important detail: delivering tangible rewards for the merchants themselves.

Analog programs such as punch cards and coupons  not only required time to manage, but were difficult to personalize to business needs. Plastic card programs were too expensive for most small businesses to afford. And—while most merchants saw the value in fostering return visits—the return on investment for loyalty programs was often vague at best. Or, it was until recently.

Loyalty marketing goes mobile

Over the past 18 months, new in-store and consumer technology has emerged that offers effective and measurable results for store managers. Leveraging the mobile devices that nearly every customer carries, these data-driven programs do more than simply count punches until the next reward. Mobile-tech loyalty programs can help management and staff:

  • Learn the names of their frequent customers
  • Identify VIP customers and track their purchasing habits
  • Develop unique loyalty programs for specific groups of customers
  • Communicate with customers and send offers directly to their phones, even when they are not in the shop

Why mobile marketing works

Recent research shows that mobile marketing is far more effective than traditional marketing tactics. In the U.S. more than 80% of households have at least one mobile phone. In fact, 50% of all U.S. consumers are currently using a smartphone. And mobile apps have the ability to send messages directly to customer devices via push notifications and SMS, which on average, get read by 97% of recipients compared to the 4% of people who open promotional email messages. Mobile coupons are also redeemed more frequently than paper alternatives, 5-20% compared to just 1%.

When it comes to driving loyalty, mobile technology also enables a greater level of flexibility than traditional programs. Merchants can choose to reward customers for the number of items they purchase, the number of dollars they spend or any combination thereof. Merchants can even create tiered perk programs that enable personalized promotions or special treatment for their most valuable customers.

In addition, mobile apps offer merchants a simplified way to track the redemption rates and effectiveness of offers with built-in loyalty analytics. The comprehensive insight into customer behavior and the added functionality of tracking, offer a good ROI. Specialty retailers can nimbly tailor programs to drive financial results.

Loyalty marketing in action

Digital loyalty programs are not new. The first programs debuted in 2008, spearheaded by the My Starbucks program. Other major chains followed suit—for example, Safeway recently launched the Just for U app to track purchasing habits and send customers personalized deals.

But today, mobile loyalty programs aren’t just for retail chains with enormous teams and multi-million dollar marketing budgets. For example, Java Stop, a small coffee shop in Lodi, CA, recently ran a month-long contest to see which employee could sign the most customers into their loyalty program. After just two weeks, the business had signed up 180 loyalty members and logged more than 600 purchases.

Independent specialty retail merchants can now run customized, enterprise-class loyalty programs for as little as $35 per month. And getting these programs started is easy. Programs such as these are already worlds apart from “Buy 10, Get 1 Free” paper punch cards. And this is just the tip of the iceberg for businesses large and small.

Alan Chung

Alan Chung is CEO of Perka, a smart loyalty program that helps small merchants and their regular customers support one another. The company’s unique system gives customers the satisfaction of being recognized with increasing tiers of “perks,” and in turn provides real, meaningful intelligence to merchants.
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