Google Acquires “Punchd”: Customer Loyalty Programs & Technology Join Forces

Customer loyalty programs have always been a catch twenty-two for small business owners. On one hand, customer loyalty programs can increase the frequency of visits a customer may make, build customer satisfaction and these programs usually don’t cost a lot. Conversely, customers will inevitably find a way to cheat the system, and loyalty programs can only offer rewards for short periods of time before they become difficult to manage. The real objective of long-term customer loyalty has always been troublesome to achieve, but customer loyalty programs and technology are on the verge of a fantastic relationship that may permanently change the face of traditional discount programs.

Before the invasion of technology, a punch-card was an efficient way of increasing customer loyalty. Customers received a unique stamp or hole-punch after each purchase that would count towards some free product; in return people would be more inclined to return on a regular basis. The overall idea works well, but it is easy for people to cheat the system or for cashiers to help their friends by giving them a few extra punches.

Eventually, grocers found a way to incorporate technology in the form of membership cards that customers could carry in return for discounts. These cards do not necessarily promote the idea of repeat visits, but the membership card model did introduce the idea that customer behavior could be monitored. Now when customers pay for their groceries, corporate offices can see exactly which items are popular and why certain customers buy the way they do. The amount of information is infinitely useful under this system, but the price for this sort of program is a deterrent for small business owners.

Now, thanks to “Punchd,” small business owners have access to a reasonably priced customer loyalty program and large amounts of information with a little more security under the medium of social media and smart phones. As of July 13, 2011, Google has officially acquired “Punchd”, a smart phone based application that replaces the old punch card idea with a digital version. Punchd software allows customers to store all of their customer loyalty cards in one place while providing valuable information to the businesses who participate. The software is relatively simple to use, and your café doesn’t need to endure a complete overhaul to employ the technology. The acquisition of Punchd is part of a much larger program entitled Google Wallet, which is likely to make a large impact on the way we do business in the future.

Punchd software even includes the ability to send out promotional messages or coupons directly to a user’s smart phone. The application also prevents users from committing fraud by incorporating location based security measures. This means that customers can only get their digital punch card checked off while standing in your café.

Other technologically-oriented customer incentives and social media platforms like Groupon, Living Social and Facebook are great ways to reach out to customers, but Punchd was developed specifically for cafés, and the marketing audience is more unique to your business and community. In effect, the people who want to know more about your café don’t have to sort through a bunch of vampire requests and event invitations to learn about the next big promotion in your store.

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Reid Jackson
Stockton Graham & Co.