Lexington, KY - Mobile loyalty programs are all the rage in marketing these days. Mobile devices are a promising way to strengthen the relationship between retailers and their customers, and many of those customers are telling companies that they welcome the interaction via mobile communication.
So companies are racing to respond, at the risk of possibly being left behind. In turn, mobile reward service providers are racing to offer their wares.
In central Kentucky, there is stiff competition to deliver that experience to both business owners and customers. One recent entry into the marketplace is Rewardix.
"This is, first and foremost, a marketing communication tool aimed at small businesses. It has a rewards program wrapped around it to drive what we call customer loyalty," said Rewardix CEO Michael Charest.
Charest, along with two other co-founders of Rewardix, was formerly a senior manager at Exstream Software, a document management company in Lexington that is now owned by Hewlett Packard, which acquired it in 2008.
Charest has talked with many small business owners, and more than a few have said they have tried such marketing techniques as Daily Deals (and their many knock-offs), coupons, yellow pages and newspaper ads.
"We know they're spending a lot of money on marketing but have no idea what their return is or if it is driving any incremental customers through the door. They want not just first-time customers but repeat customers who are profitable for them," Charest said.
Using Rewardix software, merchants get their messages and offers out to existing and potential customers through their smart phones. It's an immediate way for retailers to communicate.
"They're trying to figure out how to tie into the mobile industry and social media. We like to say we're the next evolution in social commerce," said Charest.
The incentive for the customer is that they earn points when they do certain things, like spending money with the merchant. If they refer friends who ultimately sign up with the merchant, the first customer gets additional points.
Customers may earn points for completing a brief survey, which may be as simple as three multiple-choice or true-false questions. They take just seconds to complete but keep customers engaged and the business owner informed of their preferences.
The merchant decides how many points will be assigned for each customer action, and it doesn't always have to involve a discount. It can be an offer to come in to try a product right after a ball game, concert or on a holiday - or if the moon is full, if that's what the merchant desires.
That's the key. Merchants can customize their promotions using a Rewardix template to pick out what they want to implement.
"We bring that element of control, with an analytics dashboard that allows merchants to measure what's going on with their customers so they can see what's happening with their offers," Charest said. "They learn how many times customers look at them, whether they're being acted upon and how often. They also see how often customers come into the store, how many points they've accumulated and how many are being redeemed."
Marketing trends come, and marketing trends go. Will this in-store mobile tool have "legs" for the long haul, or will it be replaced by something new and slicker in a year or so? As the mobile-app trend matures, it may be starting to wear thin, some marketing observers say.
"The increase in audience fragmentation presents challenges to advertisers looking to connect to local consumers," said Peter Krasilovsky of BIA/Kelsey, which analyzes business, financial, social and technology trends.
Others think the trend has got to be extremely "touchy-feely."
"Brands must really personalize the mobile experience, almost like personal shopping in your pocket," said David Eads, vice president of product marketing for Kony, a mobile application platform provider. "The brands that are really good at personalization are going to get more loyalty and will have an opportunity to gain more of the customer's discretionary spending and have a tighter relationship."
Rewardix originated in Jacksonville, Fla., where Charest is based. It is a beta market for the development of Rewardix. Lexington is a second test market where the team is trying to sign up merchants - everything from restaurants to auto parts stores.
"We definitely hit a nerve in the marketplace," said Charest. "Florida is much different (than Lexington). The recession has hit it much harder. We have a lot of empty retail stores in Jacksonville, Miami and Orlando. We feel if we can get traction in that market, then when the economy finally turns around, we can be part of it."
Charest has also been in discussions with an independent auto distributor about how Rewardix might help sell more vehicles. Ways that could happen would be to reward past customers for such things as coming in to test drive another vehicle or for referring other family members or friends to the auto dealer.
In the longer term, Charest is hoping to take the Rewardix concept nationwide, and investors are being sought, he said.