Loyalty Truth

One of the most fascinating, and challenging, areas of marketing is local merchant marketing. For a generation, local merchants have been limited to using newspaper ads, coupon mailers, and punch cards to attract and retain customers. That wouldn’t be terrible until you compare those tools with the ones developed for national and franchised merchants who are competing for the same dollars of consumer spend. Generally speaking, innovations in payments and loyalty have been targeted to the bigger players, leaving local merchants to decipher a way forward in the digital economy on their own.

There is irony at work here, as the explosion of activity on the social graph and changing consumer purchase decision making has spawned a portfolio of marketing solutions which local business owners can put to use, but haven’t as result of information overload. Location based marketing and mobile solutions are now affordable for local merchants, enabling them to compete with their larger neighbors living in the big boxes or the mall. Determining the right solution is a matter of awareness and education.

I’ve looked at a variety of location based systems and technology inclusive of Foursquare, Shopkick, LevelUp, Belly as well as payments innovations PayPal, Dwolla, and Square. One that just appeared on my radar is Perka and I had the opportunity to speak with Rob Bethge, co-founder and one of the driving forces behind this new location based loyalty program.

Rob and several of his colleagues at Perka hail from Carnegie Mellon. Perka is the 4th startup led by founder and principal financier Alan Chung. His previous 3 companies were sold to Sun Microsystems, Aol, and Facebook. We’re obviously dealing with a smart bunch here and the distributed team is housed in Portland Oregon and New York City.

Perka operates a cardless loyalty platform for local merchants, enabling sustainable and highly personal marketing and incentive programs. Perka is designed to allow small businesses to compete against large chains by supporting them with a loyalty program model that should make the paper punch card obsolete.

The solution is integrated with a crisp mobile application and can be used by merchants with very low start up cost and minimal impact to the cashier or point-of-sale environment in store. For capital and time starved merchants, Perka adds value by packing in sophisticated campaign reporting with its system.

Perka supports each merchant with in-store promotional material to drive awareness for the loyalty program and facilitate enrollment. A location based check-in triggers an electronic “punch” or “stamp” in the system, and customers are encouraged to return for visits to earn rewards, all of which are issued by the participating merchant.

The check-in is validated through an App downloaded from iTunes that runs on an iPod at the merchant’s counter. Through the App, store personnel are able to personally greet customers, making Perka an effective tool to improve customer service and satisfaction.

More recently, Perka added social media to its loyalty program, allowing merchants to reward customers for posts, Likes, and tweets. Coupons issued by the merchant can be shared among members, and all the activity can take place without a plastic card or key fob to add to your wallet or key ring.

You can learn more about Perka and how it is designed to benefit both consumers and merchants through a demo video here.

So far, Perka is running at over 400 locations in the US and Canada, along with a few popping up in the UK, Australia and Ireland. Over 100,000 consumers are playing the Perka game as the company expands its footprint nationwide through phone sales and incoming internet leads.

Perka is an easy to understand and implement customer loyalty solution for the local merchant, and can be just as easily adopted by mid-size or multi-location franchise operators. The program works with any mobile phone, not just smartphones. There are iPhone and Android apps, but customers may also use SMS text messaging to participate.

We don’t know all the answers for local merchant marketing, but can say with confidence that the options for local business owners are getting better all the time.