What QSRs need to know about mobile loyalty

July 6, 2010

Technology is meeting consumer demand with the abundance of mobile loyalty solutions coming onto the market. Some offer consumers the convenience of moving all their loyalty club cards to their mobile phone, while others encourage them to earn points by playing a game on their smartphones.

Quick-service operators may be confused by the abundance of options, wondering which ones will have staying power and which are simply a flash in the pan. But it's important operators do their homework now because the trend isn't going away.

Instead, it's gaining traction with the rise of the smart phone craze. Chris Reed, brand catalyst and writer for Talent Revolution Inc., said he believes mobile loyalty apps will eventually replace traditional plastic or paper cards.

"Things that we are used to holding in our hand will eventually be electronic," Reed said.

Foursquare and Gowalla are the leading smartphone applications that encourage loyalty by allowing users to earn points and rewards at their favorite businesses, including restaurants. Gowalla, launched last year, is a geocaching game that allows people to find new places and share them with their friends and family. Users earn pins and points — and restaurants can reward customers for those earnings with a special offer, like coupons when they check-in. The app also requires users to be at a precise location in order to check in, unlike Foursquare.

Foursquare, which enables users to earn points and unlock "badges" for visiting new places and returning to old ones, was launched about the same time but quickly became more popular. Reed said Foursquare is dominating the industry because of its GPS locator, accuracy and detailed city guide searches. Foursquare’s "mayor" option, which allows users to be named mayor of the locations they visit most often, also contributed to its success. Additionally, the app encourages users to share their check-ins and earnings with friends via social media.

Still, Reed said Gowalla shouldn’t be counted out. Gowalla lost some traction initially because it was prone to a lot of user errors, allowing Foursquare to gain popularity more quickly. Yet Gowalla has the upper hand in many cases: It is available everywhere, unlike Foursquare, which is in more than 100 major cities in the U.S.; and it has what Reed calls a “prettier interface,” which makes the overall application more appealing.
Both apps offer businesses the opportunity to reward users for their loyalty to their brand or location. Tasti-D-Lite is one QSR that has increased traffic and transactions by partnering with FourSquare. But most QSRs seem to waiting and watching.

Reed warns not to wait too long. The basic premise of the mobile loyalty trend is to make it easier on the customer, many of whom have lost interest in lugging around all those cards or printing out a e-club coupon. Happier customers are more likely to participate in your loyalty program — and to remain loyal to your company, which in turn will increase sales.

Reed said QSRs really need to jump on this chance to bring more loyal customers and maintain the ones they have by offering rewards. However, Reed stresses that QSRs these apps are only part of such a strategy.

"Companies need to remember that these innovations are just tools, not solutions, to better serve their customers and build relationships," Reed said.

Here's a look at some emerging mobile loyalty apps and solutions that your QSR should take a look at:
1. Motorola's Mobile Loyalty Solution

This solution, launched by Motorola in January, is the closest to QSRs existing loyalty card programs. Motorola's Mobile Loyalty Solution allows QSRs to take any existing loyalty program they have and put it in the customer’s hands. The solution allows customers to have a unique bar code that is stored in their phone, making it easier for customers to have it scanned at the point of sale.

This unique bar code enables the QSR to look up what offers the customer has received and used. QSRs can know who exactly is making purchases, to enable them s to personalize coupons and offers based on past orders from customers. Also, by keeping track of the customers’ bar code, QSRs can see what locations the person is visiting.

For customers, the solution enables them to look through a list of stored coupons on their phone.

Motorola is in talks with several QSRs about participating in the program.

2. Loopt

Loopt offers several mobile loyalty apps in the same family as Foursquare and Gowalla, with varying elements of control for restaurant and other retail brands. In general, Loopt allow users to find out what’s near them, tapping into their smartphone's GPS and providing a detailed map. Loopt lets users find out where and what their friends are doing, share information with them and update Facebook and Twitter. Users also can search, rate and comment on businesses, while QSRs can reward users with special coupons

Loopt Star is Loopt's free gaming app that allows restaurants to reward customers with special offers and coupons when they check-in a certain number of times or with a specified number of Facebook friends. Users can also become the “boss” of places they’ve checked into.

Loopt Star offers retailers the opportunity to connect directly with their customers when they’re out, driving sales and encouraging repeat visits.

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3. Tetherball

Tetherball was launched two years ago and is not an app, but a program for customers to sign up for and receive text messages from QSRs. Melodye Demastus, spokesperson for Tetherball, said it offers real-time data to QSRs by measuring customer responses, in hopes to increase sales and promote certain products. QSRs can also use this service to send special offers to their loyal customers.

The "mobile" part of the program stems from the Tetherball Tag, a RFID chip that can be affixed anywhere — and scanned for identifying information and transactional data each time a user enters a Tetherball-enabled store. This RFID chip allows users to redeem offers either by in-store RFID POS terminals or Tetherball kiosks.

All data is available via Tetherball secure web portal.

The solution is in use by a Dairy Queen franchisee and a Carl’s Jr. franchisee.

4. DineOutCheap

Launched last year, the website dineoutcheap.com provides diners with a fast way to find coupons and deals at their local restaurants. The website offers an easy and simple way to navigate to find deals in all categories from children’s meals to five-star dining. By being partnered with DineOutCheap.com, restaurants can have their promotions sent to all their fans.

The website launched a free iPhone mobile loyalty app to help small chains or individual operators to offer mobile coupons, especially those that don't have in-house tech departments.

The app, which is a paid service for businesses, uses geo-fencing technology that recognizes followers who are connected to the app when they drive by, allowing restaurants to send promotions to their phone. Customers can earn "frequent flyer" points when they check into a restaurant and forward deals to friends.

The app offers multilevel marketing by tracking who received the promotions and if they accepted them.

Dunkin' Donuts and other QSRs are looking into using this app.

Read also, Smartphone search latest tool for new customer acquisition.

Flicker photo by William Hook.

Topics: Customer Service / Experience , Online / Mobile / Social , Systems / Technology

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