SMB Loyalty Marketing Trends: A Discussion with Venga CEO Sam Pollaro

Venga CEO Sam Pollaro

The conventional wisdom in the industry is that a loyal customer brings in 5X the revenue of a new customer. A slew of loyalty marketing platforms are reinforcing the CW with new technology that reach deeply into understanding and targeting loyal customers with superior analytics, incentives and ad campaigns.

Loyalty platforms include such players as Upserve (formerly Swipely) and Fishbowl. Another one of these platforms is Venga, a provider of loyalty services for 500+ sit-down restaurants in the U.S., Canada and the U.K.

CEO Sam Pollaro tells us that Venga has seen a shift in the loyalty market over the past couple of years. It has begun to change from explicit loyalty programs (i.e. punch cards or card linked offer programs) to implicit programs using payments and social media to more subtly track customers and their habits.

Pollaro says Venga’s goal in its implicit approach is to “surprise and delight.” “When customers spend $500, an alert might be added to their profile,” and they might be given a dessert or a special table the next time they come in, he says. Or if they have indicated they like a certain kind of wine, they can be notified when a special shipment comes in.

Offine-to-online marketing is another trend that Venga is riding, mostly with the help of social media. Facebook, in particular, uses its direct response capabilities to help Venga develop “Fan Builder” campaigns, that lead to more Facebook likes; “We Miss You” campaigns that target customers that haven’t come in for a while; and “Special Interest” campaigns that will target customers based on their past visit and purchase history with specific imagery in an ad, such as a wine or beer bottle.

More than 50 percent of customers can be tracked down on Facebook from customer lists with just a phone number, says Pollaro. Because they are Facebook members, there are no opt-in requirements, he notes. The program is especially useful, since restaurants typically can only collect emails from 10-15 percent of their customers. Facebook is also more effective than programs such as Gmail, since Gmail now segregates promotional emails.

Venga is seeing especially good results for its clients since it is targeting consumers that are already fans. Pollaro says the company sees 3-5X typical restaurant response rates. The high click-through rate also cuts cost-per-click rates by 50 percent or more.

Groupon Gets $250 M from Comcast Fund: Synergies with Instacart, Next Door, Closely?

A Comcast-supported fund has plowed $250 million into Groupon, possibly leading to a broader role for the Cable and TV network giant, which could seek to leverage its enormous national and local reach from NBC/Universal and Comcast cable franchises to really make Groupon’s transition to a local marketplaces service work.

There are also possibilities to develop Groupon in the Hispanic market with the Univision Network – the mobile-driven ecommerce Hispanic martketplace is poised to take off. Several options also lend themselves via Comcast Ventures, which holds portfolio investments in Closely (loyalty services), Next Door (hyperlocal neighborhoods) and Instacart (delivery). The latter could play off Groupon’s recent focus on restaurant delivery services.

The investment comes from Arairos, which is headed by former Comcast CFO Michael Angelakis. Comcast funded the effort with $4 billion last year.

if there were any doubt that Comcast was contemplating a hands-on role, the companies said in a statement they would be working together to “identify and implement potential strategic partnership opportunities.”

Comcast is not exactly a newcomer to local marketplaces. In addition to selling advertising, typically at the large SMB level, it has sought to develop several local media properties, from local city guides to Daily Candy, a women’s consumer newsletter that ceased operations in 2013. NBC also has a history with the city guide-and-deals marketplace.

SMB Trust Index: Google “46”; Facebook “24”

Do SMBs think they “like” Facebook more than Google? That’s one theory…that Facebook has leapt ahead of Google by offering the free business page, universal penetration, and simple to use, affordable ad options. Such goodwill would theoretically help Facebook as it increasingly competes with Google for SMB marketing dollars.

But hold on: that’s not exactly the case, circa 1Q 2016. Google is enormously useful, and a lot of SMBs have been grousing about Facebook since last year, when it started throttling organic reach in an effort that has helped it get to three million paid advertisers.

The grousing is reflected in Alignable’s SMB Trust Index, which has been getting an NPS score on top vendors from its base of 6,000 SMBs in 7,000+ communities. The NPS score is a simple 1-10 rating. High ratings (9-10) signify “champions,” while low ratings (0-6) represent “detractors.”

Alignable found that Google is the 4th highest rated vendor for SMBs, with a rating of “46.” Facebook, meanwhile, is 12th, with a rating of “24.” This reflects a drop of four points for Facebook from a year ago, when it had a “28” rating.

Keeping it in perspective, however, both Google and Facebook are still showing overall goodwill from their SMB customers. There is quite a difference in their ratings compared to a low performer such as, which suffered a rating of “-61.”

These SMB Trust Index rankings strike us as unique and useful. In our view, it is likely to have a real impact on an industry that could never quite tell before where key vendors really stood with their SMB customers. In the past couple of years, it would have helped a lot as the media and general public started leaping to negative conclusions about Yelp, Groupon, ReachLocal and the Yellow Pages in general.

MarTech’s Growing Impact on Local, SMB and Niche Marketing

Chief MarTec Scott Brinker

MarTech — the integration of software and marketing — is a wild card in the new generation of marketing. The new era of Martech takes into account not only ads and promotion, but content and experience, social and relationships, commerce and sales, data and management. The question for us is how it all ultimately applies to local, SMB and niche marketing.

It is certainly true that we’re increasingly focused on MarTech-centric issues: such as driving more customer loyalty and upsells via engagement, utility, targeted promotions and analytics. In our space, its been the differentiator and evolved focus for such social and promotions oriented companies as Radius Intelligence, Surefire Social and Signpost.

The keys are the “marketing pace layers,” as described by sector pioneer Scott Brinker, in his new book, “Hacking Marketing.” Brinker notes that in the modern era, campaigns take weeks, tactics take days but feedback and iterations (i.e. social media and messaging) are in real time and have become increasingly important. While advertising will often retain a central place, other critical channels are now invited into the “core“ marketing experience. Brinker thinks it is a 70/30 ratio.

In a keynote live streamed at his MarTech conference today in San Francisco, Brinker previewed many of the attributes of the MarTech revolution. Brinker notes that there were 350 companies in the space in 2013, 1,000 in 2014, 2,000 in 2015 and more than 3,500 in 2016 – 87% growth in the last year alone.

One of the key attributes of the space is that its scope and marketing relies on so many pieces that the Microsofts and SAPs of old –which assembled monolithic building blocks of tech — no longer really apply. All the companies in the space are constantly iterating and borrowing or partnering from each other. “The real story is: how do you leverage the opportunities,” says Brinker.

LSA16: Facebook Moves Away From Social Metrics

Facebook has just announced that it has three million SMB advertisers and 50 million SMB pages. Many SMBs have attracted thousands of likes. But “one of the challenges for Facebook in the future is to move away from social metrics,” noted Joe Devoy, Facebook’s Product Marketing Manager for Local Ads, who was speaking this week at LSA16 in San Francisco.

“Local metrics that highlight true business value” is key, says Devoy. While likes are good for the ego (and newsfeeds), they aren’t as powerful as metrics that show new business.

With this in mind, Facebook is re-orienting its pages to boost dedicated traffic and analytics. One of its efforts is “Sections,” which feature call-to-actions and tips centered around shopping and services. Another effort is to boost messaging between customers and SMBs via Facebook’s integrated messaging products. With mobile ascendant, messaging is increasingly he preferred way to communicate with customers,” notes Devoy.

The end result is that Facebook is a very affordable advertising channel for SMBs, says Devoy “You can spend $30 a month on Facebook.” If they get you one call a day, most businesses will be more than covered.

LSA16: Yelp Says Ads Remain ‘Core of Product’

Greg Sterling interviews Geoff Donaker at LSA16 (Photo, LSA Insider)

Yelp and other SMB channels are providing an increasing number of marketing services to their SMB customers. Interviewed by Greg Sterling at LSA 16 in San Francisco this week, COO Geoff Donaker noted that Yelp is providing “integrated commerce in many different forms,” including bookings, integration with OpenTable, food delivery and others.

But at the end of the day, Donaker reiterates that advertising remains front and center. “The core of our product: it’s ads,” he says. While “it is hard to explain the value of Yelp to SMBs…. it is the only option other than Google in many geo-categories.”

SMBs often assume that a large number of good reviews are a substitute for advertising on Yelp,” adds Donaker. While they help, the volume from word of mouth just isn’t there. “There are like two (ratings leaders that can forgo advertising) in every town. Everyone else could use ads to enhance their traffic,” he says.

Yelp, in fact, has developed one of the largest local sales forces in the industry, with 2,000 sales reps in the U.S. alone. It also has partnerships set up with YP, Yext, Single Platform, Loku and others; and has its reviews distributed on the largest traffic sites, including Yahoo and Bing. The majority of the traffic, howver, is App-Centric. “ You have to think ‘App first,’ says Donaker. “Websites are great as an advertisement for the App.”

LSA16: Beacons as ‘A Platform Multiplier’

Belly’s John Mazur and Yext’s Raj Nijjer at LSA16. (Photo, LSA Insider)

Wireless in-store Beacons – which can identify registered users and match them to transactions, redemptions etc.– are a key part of loyalty programs run by Belly and First Data’s Perka, among others.

Speaking at LSA16 this week in San Francisco, Belly EVP John Mazur said that the loyalty company now has 12,000 SMB and franchise clients. These include a high percentage of 7-11 outlets. Customers are provided with iPad Minis, which include beacons (although not all of them are installed at this point).

While the beacon efforts are still in their initial stages, Mazur notes that Beacons have resulted in a 30 percent boost in check-ins, as Beacons capture registered members who are browsing in stores and nearby – not just those signing in when they make transactions via card or App. The beacons not only recognize Belly’s seven million registered consumers, but others as well.

“Beacons are a multiplier” for the marketing platform, and support and inform marketing budgets, adds Mazur. “They make things more seamless and reduce friction. “Loyalty, payments and beacons efforts are all converging” to provide better feedback to SMB and to complement marketing solutions, he notes.

Speaking on the same LSA session, Yext‘s Raj Nijjer said Beacons are a key asset to the new geolocation economy, and noted estimates that Beacons will generate $44 Billion in new commerce revenues. “They are truly an online to offline solution,” he said, noting that Yext has deployed beacons to “a lot of SMBs.”

In deploying Beacons, most SMBs initially focus on the retargeting piece — “take 20 percent off for having been in the store.” Messages can be sent to them via email or Facebook five or ten days later. Over the course of several months, Nijjer said that a good Beacon program enables the development of custom audiences and better analytics.