No Fairy Tale

The average U.S. household belongs to 18.4 loyalty programs, but participates in only 8.4 of them, according to the Colloquy 2011 Loyalty Census. A long-time follower of the loyalty industry, Colloquy also found the average active household earns $622 in loyalty rewards annually, but does not redeem a third of that figure.

Reward redemption is good for the industry, experts say, because it encourages and influences behavior. “If redemption equals engagement and engagement delivers customer satisfaction and profits,” says Kelly Hlavinka, managing partner at Colloquy, “then loyalty marketers should encourage their members to make the most of their rewards.”

Enter Beanstalk Data, a Charlotte, N.C.-based company that created Beanstalk Loyalty, a marketing platform that integrates POS terminals with Facebook.

Measurable revenue
“Marketing is all about influencing the next sale,” says Gilbert Bailey, Beanstalk Data’s vice president of marketing and business development. While retailers can use location-based social media services to learn who is in their store, Bailey notes it is more difficult to determine what, if anything, those customers bought.

With Beanstalk Loyalty, the transaction “checks into” Facebook when the customer swipes her loyalty card or provides a phone number at the POS. The retailer has the option to post on the customer’s wall that she visited the restaurant or purchased an item. That customer’s Facebook friends can then click on the post to receive a coupon.

Customers whose friends become customers can be rewarded with additional offers. As a result, the revenue created by social media is measurable, Bailey says.

The seamless integration of Beanstalk Loyalty, POS and social media creates an easy-to-configure portal accessible through web-enabled devices. The portal can be integrated with the merchant’s existing Facebook page to drive loyalty registrations using Facebook’s universal login. Information captured from the POS and Facebook make it possible to target mutually beneficial offers. For instance:
• A customer buys an item of clothing and while still in-store an offer can be generated to encourage her to return within the next hour to purchase a discounted complementary item.

• The customer who never eats beef is unlikely to respond to any generic hamburger coupon, however it’s delivered. A chicken or fish promotion is likely to yield a much higher return.

• Marketers can see which customer prefers a specific time of day. If one customer already visits frequently during lunch, a lunch promotion to that person will simply cannibalize existing revenue. A free child’s dinner may motivate that customer to return later with his kids.

It’s also possible to see redemptions shortly after the e-mail, Facebook or text message offers are delivered, Bailey says. This information is tracked in real time through the Beanstalk Loyalty dashboard. Marketers can analyze the redemption rate to determine whether or not the campaign is having the desired impact on customer behavior.

“Integrating the social network and the POS with the loyalty engine provides a marketer with the ability to have an intelligent conversation both before and after the transaction to deliver true closed-loop marketing,” Bailey says.