Tag Archives: Swipely

SFSW: Taking on Punch Cards with Loyalty Marketing

Loyalty and engagement programs are now flooding the local ecosystem. They see themselves as the next step up from daily deals. At the same time, they hope to be more effective than “buy 10 get one free punch cards,” according to execs from LevelUp, Swipely and Closely who were among htose who spoke at Street Fight Summit West in San Francisco.

Level Up’s John Valentine says results from his company’s loyalty program are already apparent. The discounts and loyalty points give consumers a better feeling of value, and in a review of 500 locations, have resulted in consumers paying seven percent more on average compared to regular tabs, he said.

Valentine acknowledges that the audience is self-selective. The fact that they have an iPhone suggests they’re more affluent. But it has “gone beyond the cool factor,” he says. “Using a phone for paying is becoming more normal.”

Mostly, however, Valentine says the race is on to gain a strong customer base. Level Up claims 200,000 users after just nine or ten months, and it is growing 20 percent month over month. It winds up paying $5-8 apiece for customer acquisition, he said. Even if the industry does a fast switch into NFC, and starts working more with entities such as Google Wallet, “ we don’t care,” Valentine added. “We will have a base of customers” and will be in a position of strength.

Swipely’s Angus Davis, meanwhile, suggests it is not going to be so easy getting that customer base. “Acquiring consumers is very difficult,” he says. Swipely’s approach is to build up customer loyalty, and after several months of experimentation, get them to develop restaurant specific loyalty programs.

Ultimately, it is all about fostering more repeat business for restaurants, says Davis. Sixty percent of their business comes from repeat business. Getting customer engagement and providing rich analytics will win merchant accounts over from the legacy of credit card accounts, “where bi-furcation and crust has built up.”

A different approach is being taken by Closely. CEO Perry Evans said that that the key is to give merchants “tools that get to the heart of loyalty.” Evans is especially intrigued by CardSpring, the new loyalty and promotions platform that allows consumers to opt-in to various deals and services. It puts incentives in front of consumers at a time that makes sense. “You want to give them the remote control so they can turn things on and off and decide what channel they want,” he said.

“Consumers are living their lives facedown into their phones and into their network,” said Evans. “Shopping decisions are becoming more live and based on a new combination of quality (review related) and price (putting incentive in front of consumers at time it makes sense). Give them the remote control to turn things on and off and give them a channel,” he said. That will beat Facebook. “The tools are not there. It centers only around the display ad category.”

Swipely: Loyalty Program Links Purchase Behavior to Promotions

One of the big bets in 2012 is that merchants will transition from one-time deals to loyalty efforts that keep bringing customers back. Swipely is one of the more ambitious efforts in a loosely defined space that also includes players such as Cartera Commerce, Edo Interactive, LevelUp, CardSpring and Kostizi.

Swipely’s ambition is to provide a “turnkey loyalty program” to merchants, who pay the company based on generated sales. It is targeting “Big SMBs” with revenues between $500k to $3.5 million who accept credit cards — beyond Square.

The Providence-based company has raised $8.5 million from investors that include Index Ventures, FirstRound Capital, Greylock Partners, Lowercase Capital and angel investor Ron Conway. Launched in May 2010 in Providence, the site has now launched in Boston and San Francisco, with launches imminent in New York and Washington D.C.

It has outside sales in those markets, and some inside sales as well. Over 350 merchants have signed up.

Consumers sign up to the service once, providing a credit card of their choice to link to merchant deals. They can sign up via word of mouth, or come in via merchants’ email lists or social media. After consumers opt into a merchant deal (typically $10 off and/or merchant loyalty points), they receive followup email promotions based on their purchasing history and purchasing frequency, and guided by day-parts, day of week and other factors.

We talked with CEO Angus Davis, a co-founder of TellMe and also a Netscape vet. Swipely has the advantage of not requiring any change in consumer behavior, he says, noting that 93 percent of people can just deploy their pre-existing credit cards. “There are no coupons, no vouchers. And merchants don’t need to upgrade in the store.”

The service has been especially built “with the goal of calculating the information behind transactions and tying the Web to payment networks,” adds Davis. “It is about more than moving money.”

And apparently, it is about more than social media, which was the site’s initial focus. “Social media is not as compelling as saving money and (receiving) rewards,” says Davis. He suggests that in the context of working with merchants, social is primarily useful to “review purchases in a seamless way.”