Thursday, January 29, 2015

Using Smartphones and Apps to Enhance Loyalty Programs

Capriotti’s, a 106-store chain of sandwich shops in 16 states, expects to introduce an app-based loyalty program early this year that its chief marketing officer, Jason Smylie, says will enable shop owners to enrich and fine-tune a prior punch card rewards program...The software, developed by the company Punchh, will enable Capriotti’s to award a free drink or a dessert — as an unexpected reward at the cash register — to highly valued customers on perhaps 20 percent of their visits. “You’re not only rewarding the customers who are coming more frequently, you’re also giving people an incentive to show up,” he said. “I can come in and potentially get something for free. That’s awesome.” And effective. Psychologists have a name for this kind of reward — random intermittent reinforcement — and know it as a powerful way to encourage repeat behavior. Think no further than slot machines. Casinos have zeroed in on the gambling habits of their patrons through the use of smart cards rather than coins. Retailers can also now better know their customers through loyalty apps, which may also use data from Facebook profiles. “With apps you now can target specific customers and influence specific behaviors and keep track of all the results and understand the results,” Mr. Smylie said. more

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