Case Study: Gourmet Grocer Uses Punchpoints for Foolproof Rewards

Share this:

Like many small business owners, Janea Boyles is short on time and short on cash. Rather than devoting resources to building an in-house rewards and discount program at The Mercantile, the gourmet grocery shop she co-owns in Atlanta, Boyles has opted to partner with outside marketing platforms like Punchpoints, Frequentr, and Scoutmob. She says business owners in similar situations should crunch the numbers to determine ROI, and recommends trying just one marketing program at a time until finding what works.

What are some of the biggest marketing challenges you’ve faced at The Mercantile?
We don’t have a big budget for marketing or advertising right now, so that’s always a challenge. Honestly, because we are such a small operation, having the time to really focus and make that a priority and make sure you follow through on your initiatives [has] been my biggest challenge.

What marketing platforms have you tried in the past?
We have done promotions with Scoutmob, and that [created] a very big influx of traffic for us. I am very active on Facebook, and we have a very active email newsletter that I send out twice a week. Right now we use Constant Contact. I think [building] consistent connections with your current guest base works for us. I’ve also done smaller things. I don’t like the big guys like Groupon or LivingSocial — it doesn’t work for us — but we [enjoy] working with smaller programs that are more focused and match our demographics. That’s more manageable for me. We’re also working with a new company called Frequentr. We’re piloting some of their new programs.

What does Frequentr do?
They started out being a mode for small businesses to collect data. Now they’ve shifted a little bit, and it’s more of a way for people to use a mobile app to communicate directly with small businesses. They collect small businesses onto their site, you become a member, and you develop a dashboard where you can message [a business] if you have feedback, questions, concerns, or issues. I can get a direct message from a customer through Frequentr, and I can respond to that issue, or I can attach perks or deals.

How do you decide which digital marketing platforms are worth trying out?
People come to us and ask us if we’re interested. Michelle Mattingly from WelcomeMat Services [creators of Punchpoints] had the absolute right approach. I get tons of phone calls from the big guys, and it’s so annoying. We don’t respond to that. But as I said, Michelle came in, she made a personal approach, she had connections with some of our regular guests, and she had something to offer that sounded interesting and sounded manageable. It didn’t sound like some kind of big, giant promotion where we’d be overrun. It sounded like something you [could] sustain over time. We’re a really small, community-oriented business, so that approach worked very well for us.

What was it about a rewards program in particular that struck you as something that would be useful?
Several things. Whether I consider or don’t consider [platforms] has to do with number crunching. Let’s say I sell a Groupon, and I say, “Shop at The Mercantile and get $25 of goods for $12.” Someone buys that and based on the margins in my industry, there are many of my products I’d be sending out the door at below cost. I decided that was too dangerous for us. So, that was one parameter — we’re not going to participate in any kind of “deals,” so to speak. We’d also be overrun with bargain shoppers, which are not necessarily the demographic that works for us. What I count on is building repeat business. I have found that if we get a person in the door more than two or three times, we develop habituated food traffic. I look for ways I can build repeat business, not just a one-time shopper. I liked the [idea of a] rewards program because it felt very manageable and it felt like a way to slowly build repeat business.

How does your rewards program work? You run it through Punchpoints, right?
It’s all mobile app-based. I’m not personally the world’s most tech-savvy individual, but I see guests come in and they’re always on their phones. They’re snapping pictures or scanning codes, and I’m intrigued by it. What they do is they come in, they sign up for [the program], they download the app, they get on the phone, and we have a little QR code here that is provided by Punchpoints. When [customers] come in and make a purchase, they let the retail attendant know they are using Punchpoints, and we whip out the QR code. They take their phone, they scan it, and the app records that visit. You can only get one Punchpoint per day, and it’s reward based, so after they reach five visits we have a reward for them. They can get a free baguette, which is the best selling thing we have in the whole shop. My staff doesn’t have to keep up with anything. It’s kind of foolproof. No one is attempting to take advantage of the program, and I like that it’s very user-friendly. There’s no sheet that anyone’s signing or punching or stamping. It’s all on my guests to have it on their phones, so it’s very low maintenance on my end.

As a business owner, how do you decide whether a program like this is providing a good ROI?
That will come down to crunching the numbers. When we get [more] volume on this, [we’ll] see. My biggest question will be, is this bringing us new business, or do we have guests who might come here anyway who are taking advantage of our rewards? I have to weigh my goals. I am looking to build my guest base. I want new people who might not otherwise be in, and I am hoping Punchpoints will help bring new people through the door.

What is your biggest piece of advice for business owners who are just dipping their toes into hyperlocal marketing?
It’s really overwhelming out there, just the number of things people are offering. I think it has to be looked at as a marketing initiative. A lot of the bigger guys are like, “You can get lots of new people in your store and they’ll buy over the deal amount,” but my [advice] is to crunch the numbers and know what works for you. Know that it’s not as much about sales as it is about marketing and building your business. Yes, you’re giving away free products, but are you building a long-term guest through this rewards program? It’s a tight rope between revenue stream and marketing investment, and knowing what works. [Don’t] be afraid to try new things, but at the same time, don’t dive off the diving board without really knowing what you’re getting into. I only try one thing at a time.

The other angle I would say — and I still have to work on this — is staff training. I haven’t spent a lot of time with my staff really asking them to promote Punchpoints, but I know I have to spend time with them and get some of them to upload it on their phones so they can be able to talk to guests about it. There are so many things out there, I think guests can become desensitized. If I don’t have a sales team in place to promote it and talk about it and get people on board, then it’s not going to work. After crunching the numbers, that might actually be my No. 1 piece of advice. It requires some human energy, some human capital, to get these programs working.

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.