Case Study: For Tasti D-lite Builds Loyalty with Passive Check-Ins
The VP of technology at Tasti D-lite has tongue firmly planted in cheek, as the frozen yogurt chain has evolved its basic punch card program into a highly digital loyalty effort involving Foursquare, Facebook and Twitter. According to Emerson, one out of every five customers who goes online to register a Tasti D-lite loyalty card is now enabling social connections and sharing their whereabouts automatically each time their card is swiped.
How did Tasti D-list first get involved with Foursquare?
We got on Twitter probably three and a half years ago and started really targeting customers in the New York area — connecting with them, reaching out to them, following them and doing some creative things proactively. At the time, it was pretty innovative the way that we were engaging with these customers. Let me give you an example: We had a location in the Empire State Building and we were trying to reach people inside the building, so if someone said something about the Empire State Building, we would do a little research and then reach out to them with a follow-up with a free coupon. There are 140 characters, so the entire coupon was, “This is a mobile coupon. Show this tweet and you know you’re going to get a deal.” We have always wanted to reward customers for their digital activity related to Tasti D-lite, and we were really doing that manually before the check-in specials came out. Then Tristan Walker called me up in August of ’09. He was a Stanford business student who was one of the students who had worked on a Twitter business reward case study [which Tasti D-lite had been involved in], and he said, “Hey, can I get you on the phone with [Foursquare CEO] Dennis Crowley? We want to talk to you about how businesses use these things.” He leveraged that relationship with us and got us on the phone with Dennis. We had a couple conversations, and then we were launch partners with their check-in specials in New York. That’s how we got involved. We were already trying to do it, but the mechanism that Foursquare now provides automates it.
The good news is that [cashiers] really don’t have to know a whole lot about the details of the Foursquare check-in. All they have to do is swipe a card.
Can you explain how your loyalty program integrates with Foursquare?
[At first], there were a bunch of locations that used check-in specials on and off. While we were doing that, we were also creating a loyalty program and adding this loyalty layer onto our point of sale systems across all locations. We thought, well, why can’t we integrate that with the social networks? What the customer can do [now] is take their loyalty card and register it at mytasti.com, and then make the connection to Foursquare. So when the loyalty card [is used], it automatically checks them in on Foursquare. Plus, they get extra points back toward free Tasti D-lite. It’s the same points that they get when they buy something at Tasti. When they get to 50 points, they get a free medium cup or cone. When we integrated our loyalty program [with Foursquare], we were the first to do that back in January of 2010.
How does the automatic check-in actually happen?
It’s tied to the point of sale and the loyalty card. We turned an active check-in into a passive check-in through the swiping of the loyalty card. They take their loyalty card, they register that online, and it’s integrated with the point of sale system. The Foursquare API is what we use to authorize the posting of these creative messages. We have a dozen different creative messages that [customers] can choose from that say, [for example], “I just earned five Tasti rewards points at Tasti D-Lite, Columbus Circle.” That’s the “shout” that goes along with the check-in and then you get your points. You get extra points for enabling that connection or that message to go out to your friends on Foursquare.
Are customers choosing to link their loyalty cards to their Foursquare accounts?
Sure. We have loyalty members that just register at the point of sale terminal and they don’t go online to register their card. So that is the No. 1 [option] that we have. Then we have people that go online and register their cards to get more benefits. To get the full benefits from the program, you really want to go online so you can check the point balance, you can see your history, and you can enable those social connections. Month over month, we see a greater percentage of people registering online. So that’ s a trend that we like. Adoption is something we are trying to encourage.
Of those people that go online and register at mytasti.com, one out of five are enabling a social connection, or a connection to one or more social networks. So one out of five that are registering are enabling that social connection and then sharing that activity with their friends and getting checked in automatically. If you know that the formula for adoption is utility plus convenience, then we think that automating the Foursquare check-in [is a] benefit to the loyalty program. It is something that will hopefully attract more people to the loyalty program, because we know that loyalty customers, on average, spend more money. And when you add features and benefits like this to the loyalty program, you’re getting more people that are spending more money.
In the case of Twitter, I think we have one guy that has 27,000 followers. He uses his loyalty card and with one swipe of the card, a message goes out to all of his friends or followers.
When you implement programs, you obviously have to scale those. You have to do a lot of training and implement these things effectively at all of the various franchise locations. The good news for this program is that [cashiers] really don’t have to know a whole lot about the details of the social elements and the whole Foursquare check-in. All they have to do is swipe a card, which they were doing anyway. When somebody hands them a loyalty card, they swipe the card and that’s it. It associates the customer with the transaction and we capture that data. So, [the cashiers] don’t even have to know that this person has 50 friends on Foursquare that potentially just learned about their loyalty activity. In the case of Twitter, I think we have one guy that has 27,000 followers. He uses his loyalty card and with one swipe of the card, a message goes out to all of his friends or followers.
How do customers know that they’re supposed to go online and link up their social networking accounts?
The good news is that all [cashiers] have to do is swipe the cards. The bad news is that they don’t have to know the details, so therefore they are less likely to promote it. We have to work extra hard at promoting this feature and benefit for our customers, and training the franchises and their employees on the benefits and features of this program. That’s always a challenge so that we can get greater adoption. We have the acrylic holders where we have the cards, and there’s an insert [with instructions] there. We certainly promote it there. It’s all over the website, of course. And then people are learning about it through the social networks. Because each of the posts has a link back to mytasti.com, where they can learn more about the program. So it’s kind of self-propagating.
What challenges did you have in getting the program up and running?
When I talk to other brands and they’re like, “How did you do this?” Well, you have to have the same hardware, software and processor. In a franchise environment, it’s kind of rare to have all of your hardware and your platform in a position that you can bolt on something like this to make it effective. I mean, we spent two years getting our platform in a position so that we could do something like this. It’s a little easier now because there’s SNAP [Social Network Appreciation Platform]. The people that do this have actually spun it off into a separate entity and are now offering the solution to other businesses. Now, in full disclosure, they asked us to be a part of that so we have a small piece of that investment or that concept. It’s just good practice to have all of your platforms consistent across all of your locations so that you can support something like this as it comes along. Basically, a common processor and some common hardware is going to be required across participating locations. I wore out two pairs of shoes putting these point of sales systems in at all of these locations in New York.
How do you compare the costs associated with this type of LBS campaign with other marketing or advertising costs?
It’s going to be similar in some ways. I mean, in advertising you might be paying costs per click. You might be looking at a CPM versus CPC metric for targeted advertising. [In the future], there may be a monthly service fee or there could also be transaction fees for each post that goes out or for each point of sale transaction when these posts go out. Maybe there’s a five-cent charge for each thing. But they’re targeted such that these are your customers and they are sharing their loyalty activity with their closest friends. It’s just a different way of doing targeting advertising, but it’s coming from the consumer to their friends instead of coming from the brand. Say on Facebook you’re doing a targeted ad. On Facebook you can get pretty targeted, but those costs are starting to rise. Why not have your customers share their brand affinity with their friends?
Looking forward what kind of goals do you have with your loyalty program for the future?
Obviously the trend is going to be toward making things more convenient and more intuitive. I think that already we’re seeing that. The check-in, with the early adopters, is getting a little archaic. If I want to opt in to tell you where I am, to get some value in exchange for giving you my personal information or opening my privacy up so that when I walk into a Tasti D-Lite, the technology is there. So I think we want to streamline or continue along that path just to make it more convenient for customers to interact with the brand and share their activity around the brand. But what will that look like or does that technology exist today? I don’t know. But I think we are in a good position to do that, whether that is NFC [near field communication] or whether that is geofencing. But at the same time, you still have the tie that customer to that transaction and that is going to happen at point of sale. So how do you automate that further? Going from maybe a plastic card, to simply a using a mobile device or tapping a mobile device during the transaction or before the transaction. I don’t know that we are quite there yet, but I think that we are positioned well with out existing platform.
This interview has been edited for length and clarity.