Case Study: Providence Retailer Uses Swipely to Reward Customer Loyalty

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As the co-owner of Kreatelier, a retail shop that sells gifts and textiles in Providence, R.I., Line Daems is always on the lookout for ways to reward her most loyal customers without overwhelming her staff with extra work. In 2011 she discovered that she could use Swipely, a loyalty platform tied to customers’ credit card transactions, to offer cash-back rewards with zero effort on her company’s behalf. Despite her success with the platform thus far, Daems still sees room for improvement and says it can be hard getting customers to hand over their credit card information to a third-party provider.

How did you first start using Swipely at your store?
We met [Swipely’s creators] personally at a local merchant organization meeting, and the personal contact actually helped us to get all the details. The reason we started [working with them] was because they’re local.

Can you explain how Swipely works, or how you use it at your shop?
We are set up so that the store doesn’t have to do a lot. Basically what’s happening is that customers go on the Swipely websites and register their credit cards or debit cards with Swipely, and whenever they swipe their cards and buy something at our store they get cash back. I think around 100 businesses — meaning restaurants and stores — in Providence work with Swipely, and [the customer rewards] depend on the store or the restaurant. Every store has its own rules. With us, for example, customers get 20% cash back after the third [credit card] swipe, and there’s a limit on the amount of cash back. The [money] is automatically put back in their accounts [by Swipely]. That’s how it works.

How do people know that you’re a participating Swipely retailer?
We have a sign on the counter, and we have some little business cards from Swipely that we give to all of our customers. We’re still waiting for a sticker for the storefront. That’s the plan, but we haven’t gotten that yet.

As a business owner, what is your goal with Swipely? What are you hoping to get out of the platform?
We were thinking for a long time that we were ready to set up a rewards program, but we just didn’t know how to do it. For us, Swipely is very easy. We don’t have to do anything because it’s all coordinated by Swipely. That means that customers who are loyal to us automatically get an advantage out of it. It’s a little bit like how Gap and Banana Republic give gift certificates, only here it’s easier. Whenever [a customer] buys, they automatically get cash back. And the more they buy at our store, the more cash back they get. Our goal is, of course, to get loyal customers back at the store.

Do you have any way of gauging how well Swipely is working?
Yes. They provide [us with] analytics, so we get weekly updates. We get statistics, we get names of customers, and we get the number of repeating customers. So we basically have a nice overview about what’s happening. We have around 40 customers that we know use Swipely. And of course, those names are coming back all the time. For me it’s a small number of people, but I think it has to do with some education that is needed; a really good explanation. One of the problems is that even though Swipely is trying their best to promote their business on Facebook, Twitter, online, and everywhere else — and we are [promoting it] in-store, too — it seems that a lot of people are still skeptical about giving out their credit card information.

You mentioned that you get the names of customers who’ve signed up in your weekly analytics reports. Do you use that information for additional marketing purposes?
Absolutely. The whole goal of Swipely is to connect [customers] with businesses. For example, if someone buys [from us] five times, we will get reminded with an email update. From what I understand, Swipely is connected to social networks, so that customers are reminded, as well. Of course, that’s an easy way to reach people.

As a business owner, how much does it cost you to use Swipely?
I don’t know if you are aware of this, but Swipely started their program in Providence, and all the Providence-based businesses are actually a pilot project. So we actually don’t pay any extra costs. The way it works is Swipely pays [customers] the cash back rewards, and we pay that amount back to Swipely at the end of each month. I think they started in Boston, and those businesses probably have to pay a rate for the work that Swipely is providing. But at the moment, we don’t pay any extra costs.

How do you compare Swipely to the other marketing or advertising tools you’ve used in the past?
What we have tried in the past is, whenever a customer completed a customer care card we would send them an email and have a coupon in it, or we would add a coupon to the newsletter. The problem with this is that you have to build it. It’s not an automatic system, so you have to remind yourself [to do it]. The store has been open for five years now, and we have a huge customer base. So it is hard to pick out [which customers are most loyal] when we didn’t have any statistics. It was hard to go through credit card [receipts] and see who were really our repeating customers. I don’t know of any other system that is easier than Swipely. It’s all through the credit card machine, so we don’t have to set up anything and we don’t have to think about anything. It all happens automatically.

Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.

Click here to read more Street Fight local merchant case studies.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.