January 5, 2012, 1:31 PM
Blogger

One goal, but two contrasting approaches to loyalty

Kevin Woodward

Senior Editor

We’ve all seen it. Invariably you notice someone with a keychain with more store loyalty cards on it than keys. Perhaps it’s the wallet with more loyalty cards than cash. I know when I open my wallet a couple of these cards try to slide out.

In many instances, managing all of these cards can be a hassle. Even if it doesn’t take much time to find the correct loyalty card for scanning at checkout, there is an inconvenience to managing all of the cards.

That’s why I was pleased to finally take advantage of the mobile phone-based loyalty programs offered by a couple of my favorite restaurants. One is Starbucks Corp. and the other is Jersey Mike’s Subs sandwich shop. Both are in the same strip mall I frequent. Each wants to offer enough incentives to entice customers to return, but each takes a slightly different approach.

Starbucks, the behemoth coffee chain that counts more than 17,000 global locations, has enough resources to build its own app that performs many functions. Consumers can use it to pay for their beverages, send electronic Starbucks gift cards, reload their Starbucks prepaid cards and monitor their rewards. My epiphany with this app happened when it updated my rewards program tally without me doing anything more than using the app to pay for my mocha. It was simple.

Jersey Mike’s Subs, while a good-size chain with 500 locations, uses a different method to encourage repeat customers. Consumers at my local shop supply their mobile phone numbers to receive text messages with offers. While this scheme focuses on offers rather than rewards points, it has the same goal as the Starbucks smartphone app: get me to return and buy more products. Jersey Mike’s Subs also has an e-mail-based program available through its corporate web site.

Both approaches have their place within retailing. The Starbucks smartphone app in some ways gives the consumer control over transactions typically made only at the cash register, such as purchasing electronic gift cards. Starbucks has the money and technical expertise to develop the app and keep it updated. Jersey Mike’s Sub has a different business, relying on franchisees for growth, and a different approach. These small business owners want simple services that don’t have a lot of cost associated with them. Text-based programs can serve them well.

I’m satisfied with the loyalty programs of both merchants. The best thing about them, in addition to the perks, is that I no longer have to twist my keychain or pick through my wallet to find a loyalty card to scan. My phone takes care of it for me.

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