Smart Phones  

Mobile Technology Create Appealing Loyalty Programs

Businesses are integrating loyalty programs into their existing mobile apps for customers.
 Customer Loyalty programs apps on the rise.
 
 

Written By: John Moore 

A range of enterprises -- from restaurants to retailers -- use customer loyalty initiatives to encourage repeat business. Customers might receive a free item based on a certain amount of visits and purchases, for example.

Developers now aim to get customer loyalty programs up and running on mobile devices. Many businesses already provide mobile apps to help users locate stores or find particular brands. So the task becomes helping businesses integrate loyalty programs into their existing mobile customer outreach efforts.

Different Approaches to Customer Loyalty

Approaches in this category vary.Punchh, which bills itself as a social loyalty program for restaurants, provides a mobile app version of the familiar loyalty program punch card. It also lets restaurants reward customers for referring friends and family via their social networks.

Sastry Penumarthy, co-founder of the Cupertino-based company, says he sees an enormous opportunity for restaurants and other enterprises to market themselves in a completely different way. “The technologies that allow them to do that are mobile and also social media,” he says.

If a restaurant signs up for the Punchh service, customers may download the mobile app which places a virtual punch card on their device. A customer launches the location-aware app when he or she enters a restaurant and the merchant “punches” the loyalty card when the customer purchases a meal. To validate a punch, the phone can be used to scan a receipt.

Recent Punchh customers include Max’s Restaurant Cuisine of the Philippines, which plans to use the service to reward customers for repeat visits and customer referrals.

To help restaurants dole out those rewards, Punchh taps Facebook to find out who suggested the restaurant to the user and whether the user has referred the restaurant to others. If new customers follow the original customer’s recommendation and eat at the restaurant, the merchant provides additional punches on the card. Penumarthy calls those perks “social rewards.”

In another take on mobile loyalty, PunchTab Inc. provides an on-demand incentive platform. Businesses and brands that subscribe to the platform can build “social and mobile-enabled” loyalty and rewards programs, according to the company. PunchTab’s customers include Atlantic Records, Arby’s and eBay.

Mehdi Ait Oufkir, founder of Palo Alto-based PunchTab, says he has seen solid traction for mobile-enabled incentive programs on the enterprise side. While some companies seek to cultivate customers, others use rewards programs to engage their own employees.

Oufkir cites the example of one customer who wanted to build a mobile app-based points program to encourage employees to attend training sessions. In another case, a company is using an incentive program to encourage employees to submit their billable hours via mobile phone. Oufkir says the company’s employees found their in-house reporting system difficult to use and, as a consequence, failed to submit all of their billable hours. In contrast, he says, employees find the mobile approach easier and more fun to use.

Beyond the Punch Card

Punch cards are the centerpiece of many a loyalty program. However, Steve Schroeder, chief executive officer at AppGage LLC, a mobile loyalty company based in Ann Arbor, Mich., says he believes mobile loyalty programs should push beyond the punch card.

“We take punch cards and stick it on the phone and call it a loyalty program,” he says of the industry in general. “Loyalty has nothing to do with digital punch cards.”

Instead, Schroeder says loyalty stems from understanding people and learning about their behavior. To accomplish that, loyalty programs need to harness a mobile phone’s sensors to gain insight into customer behavior and then feed that knowledge into an analytics engine to suss out the customer’s needs, he says.

AppGage’s AppGagement Loyalty Framework provides such a platform, according to Schroeder. The company’s first framework-based app, a project for Get Healthy Michigan, a statewide health program that aims to encourage health and wellness, is scheduled to launch in April.

 

About the Author: John Moore has written about business and technology for more than 20 years. Moore’s articles have appeared in Baseline, CIO.com, Federal Computer Week, iHealthBeat, and TechTarget. Areas of focus include cloud computing, health information technology, systems integration, and virtualization.

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