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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.

Loyalty Debate: ‘Collective Currency’ or Solo Destination?

Two schools of thought have broken out about loyalty programs. The first is to build a collective currency for points or other loyalty incentives that can be used anywhere in the network. This is the approach taken by players such as Cartera, Edo, Mogl, Local Bonus and numerous others covering the gamut.

The second is to work specifically with merchants on a one-on-one basis, building their customers’ points based solely on the business they do with the establishment. Groupon Rewards has taken this approach, along with Swipely, LevelUp and numerous others.

Venga, a Washington D.C. based loyalty builder for restaurants, has opted for the latter approach. “We’re powering restaurants’ own loyalty program. We’re not trying to get between restaurants and their guests,” says founder Sam von Pollaro. He opines that collective currencies developed by players such as OpenTable “creates loyalty to OpenTable, not the restaurant.”

The company was launched two years ago as a verticala-oriented data analytics firm, with the intention of eventually serving multiple verticals. Working with restaurants, von Pollaro realized that “restaurants feel like they don’t know anything about their customers. They want to know ‘Who has kids’….’who likes red wine.’”

An ideal solution for restaurants would automate activity and link to transactions, says von Pollaro. While a number of companies are linking to transactions, they may only know the check amount, date and time, he says. “They can’t tell what you ordered, who the server was, or what the guest thought about the experience, ,” he says.

Venga is seeking to provide a full suite of these services, and is especially targeting higher end restaurant groups that have four or more properties. Solutions costs from $100 to $400 a month.

Early results have been promising. Von Pollaro says that “our restaurants get feedback from their guests over 50 percent of the time. Moreover, the average check for program members is 15-50 percent higher than non-program members.”

Most of Venga’s promotions focus more on loyalty enhancers such as free deserts or drinks and special events than discounts. Those digital punch card loyalty programs “are good for yogurt places and nail salons, but giving cash back is the last thing that restaurants want to do,” says von Pollaro. “Margins are notoriously thin. I don’t see how (cash back programs) are sustainable.”

Interestingly, the company’s consumer facing brand is not Venga, but “MyLoyal Family,” which von Pollaro notes is a generic name that adds easily onto a restaurant’s URL. The URL for Pingpong Dim Sum, for instance, is Myloyalfamily.com/pingpong. “It is not about Venga,” he says.

While the company has developed roots in the Washington D.C. area, it has now hired a sales person in Denver and taking the concept nationally. It is also talking to a number of larger restaurant groups.