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Merchant loyalty programs get digital makeover
programs have come a long way since the familiar buy-10-get-one-free punch
cards. Now, merchants are keeping customers coming back for more with programs
that track purchases and offer tailored rewards.
Just a few years ago,
location-based apps like Foursquare introduced a "check-in" concept
that helped consumers discover nearby merchants, save money and uncover
bargains. Merchants could then lure customers in the door with promotions --
free drinks for the first 100 visitors to check in with the app, for example.
The market is now
flooded with similar vying startups. Yet the latest generation of loyalty
programs doesn't just allow merchants to reach out to new customers with a
broad stroke. Instead, these programs allow merchants to get customer data,
target repeat shoppers with personalized offers and even get customers involved
in spreading the word about the business.
Here are some to
- Swipely: This 3-year-old company started as a social network
that allowed users to share their purchases with friends. When that didn't
work, it evolved into a credit card-based loyalty program geared at small
Customers link their debit and credit cards to their
Swipely accounts, while merchants set up point-based loyalty programs. Whenever
customers use their linked cards at participating merchants, they receive
loyalty points that can be cashed in for free goods or discounts.
March 2012, Swipely
announced that it was rolling out additional tools for merchants that let
them reach out to customers with deals structured around recent purchases. Merchants
can use Swipely's dashboard to evaluate the number of days since a customer's
last visit, the average amount that customer spends and what the customer
regularly buys. The businesses can then send customers "we miss you" messages
with deal offerings based on their shopping habits -- which will hopefully
bring these shoppers back.
- LevelUp: This year-old mobile
payments platform (available to businesses in New York, San Francisco,
Philadelphia and Boston) allows users to pay by scanning a QR code with
their phones. Customers link the cards already in their wallets with a
LevelUp account. They then receive a unique QR code, which they bring up
on their phone's screen whenever making a payment. The merchant scans the
code to complete the transaction.
paying with LevelUp, customers receive exclusive discounts. A
first-time-shopper discount gets them in the door, and the store credit they
can "unlock" after certain spending levels keeps them coming back. LevelUp also
compiles data for merchants that helps them analyze who their customers are and
what they're buying.
- Ox&Pen: This Chicago startup, which launched in March 2012,
has a network of local merchants -- and a unique loyalty program that rewards
customers not only for repeat business, but for spreading the word on
download the Ox&Pen app to their phones. They can then accrue points
redeemable for deals in several ways:
Making purchases and
scanning the receipts into their phones (Ox&Pen approves the transaction
and deposits points into the customer's account).
Checking in with their
smartphones when visiting the business and sharing that check-in with their
Writing a review about
the business and submitting it to Ox&Pen.
customer doesn't have to make a certain number of purchases before receiving an
initial reward, as amassed points can be redeemed immediately at any place
within the Ox&Pen network. Thus, customers have an incentive to make
frequent visits -- and to provide the merchant with free advertising in their
social networks to rack up more points.
- Perka: This tool operates like a mobile-based version of
traditional punch cards. Launched in October 2011, it's been targeting
small businesses that can't afford the complex loyalty programs that
larger businesses can.
each purchase, a customer earns digital "stamps" that are stored in their Perka
accounts. Merchants decide how many stamps are needed to earn a reward.
customers visit a participating store, they alert the merchant by checking in
on a smartphone or by sending a text from any phone. That way, the merchant
knows which customers are in the store and how many points they have. If, for
example, a customer needs just one more stamp for a reward, the merchant can
encourage her to make another small purchase on the spot.
Chatterfly: This mobile-based rewards service (launched
in August 2011) assists businesses in engaging their customers via social
media. As with Ox&Pen, customers can earn points for purchases -- and for
sharing those purchases with their social media networks.
Different social media activities (tweeting, recommending the business to
friends, or snapping and sharing a photo) earn customers different numbers of
points that can be redeemed for goods or special VIP events. Chatterfly
encourages participating merchants to entice customers with other fun ways to
earn points -- like having in-store scavenger hunts that involve finding and
scanning QR codes. In other words, businesses can establish loyalty by getting
their customers to interact with them.
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Published: April 23,2020
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