STORES Magazine - January 2010 - (Page 38)

WORTH WATCHING / CUSTOMER LOYALTY Sticker Power Mobile loyalty program keeps retailers tethered to customers BY KAREN M. KROLL ll retailers want to improve connections with their customers. That’s the thinking behind Tetherball, an Indianapolis-based mobile loyalty firm that helps clients “tether” themselves to customers through promotions, rewards programs and ads delivered to their mobile devices. on investment, Highley says. Another critical component: store personnel must actively promote and explain the program to customers. When they do, the numbers of members can quickly accelerate. Some locations have captured more than 500 members in a matter of weeks: that’s typically a result of promotional activity and members forwarding information about the deals to their friends. “Because it’s mobile, it’s a viral solution,” Highley says. Tetherball manages loyalty and rewards programs, and provides analysis and reporting capabilities. It launched an RFID-enabled mobile loyalty program with Dairy Queen in mid-2009. Customers who opt into the program affix an RFID sticker to their mobile devices; this sticker takes the place of loyalty cards that customers might otherwise attach to their keychains, and one sticker can be used for multiple retailers. To enroll a customer, a store employee merely passes the sticker across a contactless payments reader. The customer will immediately begin receiving messages (like coupons or details on sweepstakes) on her mobile device. While one chip can connect consumers with a variety of retailers, Tetherball doesn’t share customer data between and among retailers. In fact, the company doesn’t have a great deal of information on specific consumers beyond their cell phone numbers and affiliation with retailers’ programs. Moreover, the data it does maintain is encrypted in the same way that credit card numbers are encrypted, says Tetherball president and COO Jay Highley. As a result, it can’t be stolen or read from the chip. One key to a successful mobile loyalty program is crafting promotions and deals that are “of the moment,” Highley 38 STORES / JANUARY 2010 says. While any retail operation is a candidate for a mobile marketing program, some types tend to fit especially well. For instance, a quick-serve restaurant may send its customers an electronic message promoting its new breakfast Integrated with POS If the retailer already has readers to process contactless debit and credit cards, implementing a mobile marketing solution only requires installing set-up software at the retail storefront. “Our solution can ride over the existing network that accommodates contactless payment,” Highley says. The mobile marketing solution must be integrated with the retailer’s POS system to track redemptions and purchases. The work required to complete the integration varies with the retailer’s system, but typically can be completed in a matter of weeks. Because all members of the loyalty programs have Survey Says: to opt in, they’re likely to 53% of poll respondents be especially loyal. On avinterested in receiving mobile erage, Tetherball’s clients alerts from restaurants are seeing redemption Source: Harris Interactive rates on their promotions menu in the morning, and describe a of about 20 percent, with some prodinner deal later in the day. In fact, 53 grams hitting more than 45 percent, percent of respondents to a recent HarHighley says. ris Interactive poll said that they would That compares with typical redempbe interested in receiving mobile alerts tion rates on paper coupons that are in from restaurants. the low single digits. In addition, the Tetherball typically focuses on retailopt-out rate for those enrolling in Tethers with multiple locations, but a large erball-supported programs has been less StORES member base isn’t required to make a than 10 percent. program pay off: Many programs that Karen M. Kroll is a business writer boast just a few hundred members per based in Minnetonka, Minn. location are generating positive returns WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - January 2010

STORES Magazine - January 2010
Editor's Page
President’s Page
Retail People
CEO Profile
20 Ideas Worth Stealing
Digital Coupons
Customer Loyalty
Labor Scheduling
Data Management
Human Resources
Retail Fraud
Loeb Retail Letter
ARTS Update
NRF News
Point of View
Retail Industry Calendar
End Cap
Global Powers of Retailing

STORES Magazine - January 2010