Case Study: Charlottesville Cafe Increases Customer Frequency With Cardagin

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At Calvino Cafe in Charlottesville, Virginia, owner Katie Kroloff was already looking for a marketing program that provided trackable results when a salesperson from Cardagin Networks walked through her door. The loyalty platform provided many of the same benefits as the punch card system she had been using, but with fewer headaches and greater rewards. Since implementing Cardagin at her cafe earlier this year, Kroloff says she’s already run $8,200 worth of transactions through the network — a “significant” amount for a small business in Charlottesville.

What have been some of your biggest challenges at Calvino Cafe when it comes to advertising or marketing?
Before we started with Cardagin we did regular advertising, but rarely would you get any feedback unless people would say, “I heard you on the radio,” or “I saw your ad in The Hook.” So if they did come in, you never knew. We would also do shout outs and post specials on Facebook. That worked relatively well, but it wasn’t connected to anything that brought people in continuously. For instance, on Facebook we would do “free cookie Tuesday,” but [we] would have people come in for a free cookie on Tuesday who [we] wouldn’t see for the rest of the week. We also had little sandwich cards. The problem with those was that people would lose them, or they would come in with six of them and they would have to combine them. It was very limiting because they were only good for a sandwich, so it wasn’t user-friendly.

How did you first find out about Cardagin Networks in particular?
We had a salesperson from Cardagin come visit us; his name was Sam. We own two businesses, Orzo Kitchen and Wine Bar and Calvino Cafe, and Sam first started visiting Orzo. We’re all very skeptical of this, but this wonderful young man came and visited us a number of times for a year until finally we were like, “Okay, we’ll give this a try at Calvino.” Within the first week I was like, “I can’t believe I didn’t start using this sooner.”

What was it about the salesperson’s pitch that made you want to give the platform a try?
He showed me the way it worked. He came in with the technology, and showed me the way the scanning worked and how automatically the customer’s name comes up. You can track what the customer has done with you, and it tells you who your top buyers are. I guess I’m a sucker for technology, in that respect. It was really seeing the way it worked that turned me on to it. Another great thing about Cardagin is that the salespeople do come back again and again to make sure the program is working. They don’t just sign you up and leave you flailing like a lot of other programs do. We tried daily deals, and they just sign you up and then you’re left flailing. You get people who just come in and use the daily deal, and then you never see them again.

So I take it the loyalty aspect of Cardagin was especially important to you.
If they’re loyal, they’re coming in again and again. It’s not just a one shot deal. Especially in a market like Charlottesville where it’s a relatively small town, you need those people to come back. You’re not in New York City where you’ll never see the same person twice because there’s a constant influx of new people. In a smaller market, you need to have a presence that is constant.

Can you walk me through how the Cardagin platform works at your cafe?
In our cafe we have an [iPod] Touch that is used exclusively for Cardagin. When a customer comes in with their iPhone, Droid, or Blackberry, they will hold up their phone with their QR code on it, and I’ll punch in a transaction button on the [iPod] Touch and scan the QR code. Their name comes up, I put in the amount that they spent, and they get a point for every dollar they spend. Those points at Calvino go toward things like a free cookie for 10 points, a free coffee for 30 points, or a free sandwich for 50 points. We also have it connected to our other business, which is more fine dining. If they get 200 or 300 points they get either a $25 or $50 gift certificate.

How do customers know to sign up for Cardagin or download the app on their phones?
We have some great POS cards that explain how to use Cardagin. We also will personally tell people about Cardagin when they come in. We’ll say, “Are you a Cardagin member?” and people will often say, “What’s that?” Then we’ll explain that it’s an application you get for your phone that runs loyalty programs throughout Charlottesville. When you join Cardagin, you automatically have joined the loyalty program for 60 businesses in town. People often will jump at the chance to do that.

What types of results have you seen since you started using Cardagin at your cafe?
This week we have had about $900 run through Cardagin alone. We’re a tiny cafe, so that is a significant amount of money. I would say half of those people we had never met before we started using Cardagin. Since I started using it — and I think we’ve been with them for about four or five months — I’ve had about $8,200 go through Cardagin, which is just significant. The great thing is that it shows just what kind of business we’re doing. It’s actual; it’s not guesswork. We’re not like, “We put an ad in the paper and we kind of got busier.” We know what’s going through Cardagin and we know who those people are. Previously, there were numerous customers whose names we did not know. Now, we’re learning everyone’s names because their names come up on Cardagin. That is extremely valuable in a business, to be able to call people by their names as they walk in the door.

Do the transactions end up being higher among customers who are using Cardagin?
I don’t think the individual transactions are any larger for Cardagin. I would just say that people are coming in [more] because they say, “I’m getting close to getting the gift certificate at Orzo, so let’s go to Calvino for lunch and that will put us up over the top.” So they will come to my place instead of, perhaps, another place that’s not using Cardagin.

How does pricing work with Cardagin?
We pay a monthly fee. Then for the customers, it’s absolutely free. I should add one more thing, too. Some of our older customers will say, “Well I don’t have a smartphone.” In that case, Cardagin is connected or linked to your phone number. So if people don’t have a smartphone, they can come in and give us a phone number and we put that into the [iPod] Touch manually and then they can use Cardagin. Sometimes if I have the time and I have my computer out, I’ll just go to Cardagin and I’ll sign them up for it.

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

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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.