To Win Restaurant Loyalty, Punchh Puts Brands Above Platform

By Pete Rizzo, Editor (@pete_rizzo_)
 
Between daily deals, traditional coupons, mobile games and social media campaigns, today’s restaurant owners have more ways to increase brand loyalty than ever. But, with so options, how can merchants ensure that their loyalty program puts the emphasis on their brand and their messages, not the platform they use as a delivery service?

Founded three years ago, Punchh is aiming to answer this question. By using a full suite of services – loyalty, gaming, reviews, referrals, campaigns and analytics – made especially for restaurant owners, it’s made a name for itself as a one-stop mobile solution for merchants looking to bolster return on investment (ROI).

Punchh’s most satisfied customers, like Rich Reyes, owner of a Buckhorn Grill franchise in California, report that 50 percent of users who sign up for Punchh visit again. More surprising are the social metrics it’s delivered. After just four months of operation, Reyes indicates more than 200 customers have written a review of his location.

Punchh can’t do all the work on its own, but by providing a successful forum for engagement, its solution could help merchants increase sales. Harvard Business School has found that a one-star online review leads to a 5 to 9 percent increase in revenue for restaurants, and by providing more reviews for loyal customers, Punchh could help sway the fate of troubled chains.

For more on what sets Punchh’s solution apart, we spoke ot Sastry Penumarthy, the California company’s co-founder and vice president of marketing and business development to learn more.

PYMNTS.com: This is the first time we’ve featured Punchh on PYMNTS.com. For those who aren’t familiar, can you give us a brief overview of – pardon my pun – what you bring to the table for restaurants?

Sastry Penumarthy: Fundamentally, engaging customers on mobile devices is more important for restaurants than it is for any other industry. Food is social. Customers love to talk about food. They love to recommend good experiences to friends and family. In this very social context, customers expect to engage with the restaurant brands they like.

The majority of customers enter a restaurant carrying a mobile phone, which presents a tremendous opportunity for restaurants to engage them. Punchh makes it incredibly convenient for restaurants to engage their customers in and out of the stores – via gaming, surveys, loyalty, reviews and referrals. Punchh also makes it really fun and easy for customers to engage with their favorite restaurant brands, earn and redeem rewards, share their experiences via social media and recommend the brands to their friends and family.

Through mobile engagement, restaurants can gain valuable insights about their customers. In turn, they can use that information to enhance the customer experience by offering personalized offers and acknowledging customer presence and preferences – which keeps customers coming back and bringing in their friends.

Punchh is a one-stop shop mobile solution that includes branded mobile apps for campaigns, games, gift cards, loyalty, online ordering, payments, referrals, surveys and integrates with social networks and operators’ POS systems to gather 360-degree customer insights. Punchh helps restaurants increase repeat visits, word of mouth, new customer referrals and return on investment from marketing campaigns.

On the surface, Punchh seems like a more merchant-focused version of Yelp. What separates Punchh from Yelp and other restaurant loyalty platforms like OpenTable?

Both Yelp and OpenTable are networks, with Yelp focused on use and reviews, with OpenTable focused on reservations. The result is that customers direct their loyalty to Yelp and OpenTable rather than to the restaurant. By contrast, Punchh works on behalf of merchants to engage loyal customers and acquire more customers by engaging friends, thus promoting loyalty to the brand. Also, unlike with Yelp and OpenTable, restaurants using Punchh own and control the insights they collect on their customers.

Punchh appeals to customers by engaging them in a way that presents a brand in a variety of contexts: gaming, surveys, loyalty, referrals and gifting. For customers, having a single app makes the mobile experience fun, intuitive and useful. Punchh’s cutting-edge technology can make it easy for brands to just have a single app to which they can add new capabilities to engage customers as they need it. Brands don’t need to worry about maintaining multiple apps or skyrocketing costs of ownership.

One interesting feature of your service is how it incorporates gaming. What factors drove your decision to offer gaming as part of your service? Can you share an example of a successful mobile gaming strategy you created for a merchant?

The primary objective in offering a single branded mobile app is engaging customers on their mobile devices. Gaming is a way to broaden that engagement inside and outside of the restaurant, starting with loyal customers and extending to their friends and family. It provides a chance for customers to continue to interact with the brand and earn additional rewards.

For example, working with one customer we recently developed and introduced a game with the objective to increase engagement. This national 600-unit quick-service restaurant (QSR) brand has a highly engaged customer base as indicated by the brand’s Net Promoter score of 75 percent. Customers can interact with the brand even when they are not in the store, earn additional rewards and share their progress on Facebook and Twitter. By taking engagement out of the store, the brand complements in-store engagement through loyalty, reviews and surveys.

From the looks of your website, it seems Punchh is mostly gaining traction with smaller, regional merchants and franchise owners. Is this where you think your service can best fit into the market or is this just a snapshot of the early adopters that have gravitated to you service?

Punchh has been gaining traction with restaurant chains of all sizes – large national and small regional chains. We are working with some very interesting new brands that target millennial customers. We’ve recently announced exciting programs for Rita’s Italian Ice, Earl of Sandwich, Voodoo BBQ & Grill and Vino Volo. We will be announcing more customers as we help them launch their mobile apps.

You just received $3 million in new funding in August. Would you care to share any of the new projects or initiatives that will be benefitting from this funding in the coming months?

Three years ago, we started Punchh with a vision, and now we are the market leader. This round of funding will fuel our already solid momentum and cement our market leadership position in the $20 billion U.S. restaurant marketing segment.