As technology marches on, it seems to be taking us in directions further away from the simpler things in life. However, in the case of at least one kind of new technology, small businesses, like mom and pop shops, could benefit immensely.
Location savvy mobile devices, cheap apps and cloud computing have already begun sending consumers back to shopping at family owned neighborhood businesses, helping a segment of the marketplace which not too long ago seemed to be going the way of the dinosaur.
Independent merchants have already seen how on-line companies can help their business. Groupon offers daily deals; FourSquare with its “place-based social media” focus, has brought business back to real, brick and board stores.
The next phase of technology helping small business has begun with a class of startup companies which concentrate their focus on keeping customers loyal, coming back again and again.
Gaia DiLoreto is the owner of By Brooklyn, a Brooklyn-based shop that sells a wide variety of “fine goods” which are made exclusively in Brooklyn.
“I’m always looking for ways to attract new business, but especially to encourage repeat business,” says DiLoreto. ” A regular customer is my best customer.”
In her efforts to keep those customers coming back for more of her selection of jewelry, household goods (like the fortuitously named Gowanus Sink, shown above), food, clothing, and a lot more, DiLoreto signed up recently with Perka. This Portland, Oregon based startup offers a simple-to-use app which lets customers earn rewards every time they make a purchase.
Perka, and other companies like it, basically replace the little cards which were punched with holes after each purchase, then after ten, or whatever number of purchases, the customer receives a reward, whether it is a free additional product, or a discount. The app, which is inside the customer’s smart phone or other mobile device, has the distinct advantage of not getting lost just before the customer has earned the discount.
These apps have an additional appeal over the punch cards; that is the ability to track customer behavior. It is possible for businesses to see the effectiveness of their promotions and other information which can be crucial when businesses are devising marketing and business strategies.
“Many merchants are surprised to find that as much as 70% of their revenue is generated by just 10% of their customers” says Rob Bethge, a cofounder of Perka. “If you can increase the frequency of their visits, even from once a month to twice a month, that can have a big impact,” he says.
By Brooklyn worked together with Perka to create their awards program. Every time someone spends $20 at By Brooklyn they receive a stamp. After 5 stamps they get a coupon worth $10. After that the deals get more enticing; the next five stamps earns a $15 coupon, and after that $20.
Although it is clear that internet-based commerce is here to stay, tools such as those that Perka offers can go a long way to helping keep small businesses in business.