BrainTrust Query: Enter Perka, Exit Punch Cards
Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.
For a generation, local merchants have been limited to using newspaper ads, coupon mailers and punch cards to attract and retain customers. That wouldn’t be terrible until you compare those tools with the ones developed for national and franchised merchants who are competing for the same consumer dollars.
Generally speaking, innovations in payments and loyalty have been targeted to the bigger players, leaving local merchants to decipher a way forward in the digital economy on their own.
Location-based marketing and mobile solutions are now affordable for local merchants, but there is irony at work here, as the explosion of activity on the social graph and changing consumer purchase decision making has resulted in information overload.
I’ve looked at a variety of location-based systems and technology inclusive of Foursquare, Shopkick, LevelUp, Belly as well as payments innovations PayPal, Dwolla and Square. One that just appeared on my radar is Perka and I had the opportunity to speak with Rob Bethge, a co-founder of this highly personalized and incentive-based loyalty program.
A location-based check-in triggers an electronic "punch" or "stamp" in the system, and customers are encouraged to return for visits to earn rewards, all of which are issued by the participating merchant. The check-in is validated through an app downloaded from iTunes that runs on an iPod at the merchant’s counter. Through the app, store personnel are able to personally greet customers, making Perka also an effective customer service tool.
The crisp mobile application provides a very low start up cost and minimal impact to the cashier or point-of-sale environment in store.
More recently, Perka added social media to its loyalty program, allowing merchants to reward customers for posts, Likes, and tweets. Coupons issued by the merchant can be shared among members, and all the activity can take place without a plastic card or key fob.
So far, Perka is running at over 400 locations in the U.S. and Canada, along with a few popping up in the U.K., Australia and Ireland. Over 100,000 consumers are playing the Perka game as the company expands its footprint nationwide through phone sales and incoming Internet leads.
Will Perka and other LBS (location-based services) solutions spell the end of paper punch cards? What criteria should a local merchant use in deciding which LBS approach, if any, to adopt? Are these emerging location-based POS solutions better suited for local merchants or could they be adopted by national chains?