In a perfect world for merchants, building a loyal customer base would be as easy as luring them in with a great deal and then banking on the fact that they’ll just stick around after they’ve had a chance to experience the product or service. In the real world, however, it just doesn’t quite work that way. Deep discounts can be effective as bait, but are not a long term stategy, according to MPD CEO Karen Wesbster
“Unfortunately, the data shows that the majority of consumers are not actually committed to any particular brand, and would gladly switch than fight,” Webster noted in an article earlier this year. “The siren song of the discount works pretty well. Well, at least once. So, score one for the consumer, but heap lots of minus points on the retailer who’s making a big investment in a consumer who’ll not likely return ever – or at least anytime soon.”
LevelUp, working in partnership with tea purveyor and one of its white label customers, Argo Tea, thinks it can use mobile payments technology to change that outcome. In particular, to use Argo Tea’s mobile loyalty app to leverage a discount offered through Groupon, into a better consumer interaction that’s sticky enough to draw that customer back.
“Argo Tea and LevelUp are embarking on a really fun experiment with Groupon,” explained LevelUp’s Crys Calderon. “Argo is offering customer deals through Groupon but what makes it ‘fun’ is that customers will need to redeem their $15 or $25 coupon through the Argo Tea App which is powered by LevelUp.”
Argo and LevelUp have been collaborating since May, and launched its app in early November.
Argo Tea has a very interesting loyalty structure, Calderon explained. Argo offers its followers various levels of loyalty based on the number of times they’ve visited their favorite Argo locations. That’s a little different than the typical LevelUp merchant scenario, which rewards consumers based on spend. Argo’s app is an opportunity to test a visit-based structure, and now with the Groupon offer, to marry that with a discount offer.
Argo also has a unique, and rather impressively, tea-centric sense of humor– the (sic) LoyalTea program ranks customers starting at SpealTea, to PrioriTea, to CelebriTea to RoyalTea.
“As far as I know this is the easiest way to become royalty,” Calderon joked.
Other than enhanced status, the integration of the Groupon offer into the Argo app facilitates enhanced tracking and engagement in Argo’s relationship with its customers.
“Argo Tea will be able to see exactly which customers redeemed their Groupon voucher, they’ll be able to see how much they spent on that credit,” Calderon said. “They’ll also be able to track those customers beyond that credit and see how they behaved, whether they came back, how many times they came back and how much they have been spending.”
Beyond that, Calderon noted, merchants will also have an enhanced ability to reach out, through the app, to the customers that didn’t engage past the original discount with more customized inducements for future engagement.
This is the first experiment, and one that LevelUp hopes will demonstrate what merchants can do with its open platform like LevelUp’s and its ability to integrate other third party programs like Groupon into their own apps and enhance and track their effectiveness. Calderon says that while this deployment with Argo is a first, it will not beLevelUp’s last.
“We’re working with what we’re calling the LevelUp Campaign Lab which will be beta testing Groupon campaigns with other merchants.”
Tea enthusiasts can jump in on the Argo Groupon now which is active. Future campaigns are under construction at LevelUp, but Calderon notes that like the “fun experiment” that’s starting today, LevelUp is looking to its merchants to tell them what they want to offer to consumers, so they can use their flexible platform to help them bring it to life. The goal is to help merchants use tools to create sticker, stronger and more profitable customer relationships.