After more than 60 years in the ice cream business, Dairy Queen (DQ) knows how to market its brand. One of its franchisees in Indiana is testing a new loyalty program that uses a tracking chip or Tetherball Tag to alert customers of delicious deals, such as Brownie Batter Blizzard treat.  Tetherball’s unique approach helps clients “tether” their brand to target audiences by affixing a tag to their cell phones like a sticker, announcing weekly specials for Blizzard Happy Hour deals or two-for-one Dilly bars via text message.

The DQ application is the first to incorporate Tetherball’s RFID (Radio Frequency Identification) technology in the US. Headquartered in the Indianapolis area, Tetherball 360 has an entire suite of full customizable mobile loyalty programs, some using RFID technology, others not.  To redeem the coupon, customers’ RFID chips are scanned at the restaurant terminal. VIVOtech provides the radio frequency (RF) based contactless payment device that reads the stickers.

The RFID-enabled mobile solution is simple and easy as long as consumers are willing to cooperate.  Retailers benefit by being able to track customers’ buying behavior through an ID number assigned to each phone. There is no disclosure of names or personal information. This kind of information helps DQ to tailor new menu items to customer preferences, time of visit or other purchase data.

Jay Highley, president and COO of Tetherball, said, “Mobile marketers have been struggling to develop a solution that not only provides an easy method to deliver targeted offers to mobile users, but allows them to measure the return on their investment.”

Highley states that mass adoption of mobile marketing using barcoded coupons hasn’t happened because it’s too complicated, with a plethora of technical and user issues at the point of redemption. “Our solution doesn’t use mobile coupons or barcodes, or for that matter, require any type of mobile screen visuals to redeem offers.” Tetherballs RFID-based solution works on any mobile phone, eliminating fraud and letting clients measure the performance of their campaigns with pinpoint accuracy.



Fulfilment of Gift Cards

Since 2000, membership in US loyalty programs increased to more than 1.8 billion from less than 1 billion. The proliferation of gift cards through incentive programs requires a fulfilment system for companies that institute loyalty programs for their customers and/or employees. 

For instance, a Toyota dealership gives customers a $5 Starbucks card for taking a test drive. Where does the dealer get the cards and how does he manage them? For security purposes, the customer is issued a code, not a card, which he uses to redeem the card online.

In a different type of situation, many companies that are sales-driven incentivize their reps by running sales contests. Winners receive a code or coupon, which they use to redeem their gift cards online. Who fulfils the orders for cards?

National Gift Card Corp. (NGC) is a provider and distributor of more than 170 brands of gift cards.  They work behind the scenes to supply thousands of companies with retail branded and open loop gift cards.  NGC, whose retail partners include Lowe’s, GameStop, Amazon and Subway, offers aggressive discounts and doesn’t require minimum orders from their corporate customers.

“We create the technology that enables recipients to redeem their rewards,” says Rick Rubin, VP of Strategic Partnerships.  Recently, NGC launched a new platform called NGCDirect, a web based order platform, enabling customers to order more efficiently and streamline solutions for ordering and reporting.

“We consider ourselves the gift card engine for companies’ customers,” remarks Rubin. NGC provides gift cards and fulfilment services to many Fortune 100 companies, loyalty and bank reward programs, schools, fundraisers, and charitable organizations. The cards are held in a secure Visa certified facility in Illinois.

Despite the qualms in the gift card space due to new federal regulations, business is good. Rubin reports that sales are up double digits in 2009 and they have added many large enterprise customers this year.  “Our partners are seeing huge benefits of using gift cards as a vehicle to incent their customers to buy their products/services,” says Rubin.   “One of our largest customers saw an increase of over 250% in incremental sales when they used a ‘gift card’ as an incentive to their sales promotion.” 



Point-based Loyalty Programs

EZRewards creates point-based loyalty programs designed to increase frequency of customer visits. The program utilizes a multi-functional POS terminal loaded with the EZ Rewards software and a state-of-the-art internet backend that records awarded points as well as other information that allows businesses to track the patterns of customer spending and visits.

Mark Rubenstein, CEO of EZRewards, concentrates on the restaurant business and other retail establishments that need to stand out in a budget constrained economy. Karen Janis-Brown, owner of Lantana Ale & Sports Bar on Dixie Highway in Lantana, FL says she is impressed by the benefits of the Loyalty Points Program she has started in the family business.

The EZRewards program gives one point for $1 spent, and the customers do not have to carry around a plastic card.  Brown says the program is easy and more than 800 customers have signed up.  The diners get a point for every dollar they spend. At 250 points, they get a $25 gift card; 150 points, the reward is $10 gift card. The loyalty card itself is only required for redemptions to avoid fraud. Otherwise, customers can just give their phone number to the staff.

EZRewards keeps track of membership data for the restaurant. The program has enabled Lantana Ale & Sports Bar to not only increase their client database, but also to query the system to find groups of customers to whom they can send promotions.   “The program has helped us sort customers by geographical location, for instance, and send coupons to entice them to come in,” says Brown. “Through the system, we also know when to send birthday congratulations so we can celebrate dinner with them.”

“The key to any loyalty program is to acknowledge and incentivize existing customers and keep the program as simple as possible,” says Rubenstein. 

Verizon Business Link Rewards is a points-based loyalty program for Verizon’s small- and mid-sized business customers. Members earn points based on their monthly spending with Verizon phone, Broadband, and long distance services.

The B2B loyalty program has been in existence for 10 years but was stagnating, and annual expenses were increasing. Verizon selected Kobie Marketing to revamp the program. As a loyalty program provider, Kobie designed changes to revitalize the program with new rewards and partner offers, member surveys, and a comprehensive non-member database to serve as a source of new enrollments.  Kobie also implemented a monthly performance analysis and online reporting and new Key Performance Indicators to measure the program’s financial performance. Together with technology improvements, a winning loyalty program is in place.

Now more than ever, loyalty programs are the craze to encourage repeat business. They also serve to create good will between companies and employees to motivate salesmanship. Building loyalty is an essential element of any good marketing plan, to enlarge marketing opportunities and add revenues to the bottom line. Clearly, deployment of new technologies and innovations to streamline the process are required to make any loyalty program effective and sustainable.