PunchTab CEO on Loyalty Programs: “The Wheels Are Coming Off”

The utility of loyalty programs is stronger than ever, as they help businesses connect, engage, drive traffic, refer friends, purchase and track customer actions. But efforts to determine loyalty aren’t made easier with all the noise in the system.

Usage is coming in from all over the place (phones, tablets, social networks, reviews, etc.). And while new efforts can be enhanced by tapping into Point of Sale systems, hundreds of these aren’t compatible with each other.

“The wheels are coming off” for loyalty programs, notes PunchTab CEO Ranjith Kumaran. In fact, the evolution of loyalty channels has been moving so fast that PunchTab recently received an RFP from a major Consumer Packaged Goods company that specifically ruled out any comprehensive loyalty solutions. “They didn’t want to be locked into an inflexible system for several years,” says Kumaran.

PunchTab has been in development for three years. The Palo Alto-based company, which currently supports 17,000 loyalty campaigns, has raised $5.3 Million. Its whole effort is to track everything. The company is currently tracking 40 different loyalty-related activities.

“It is risky to build a program around a single channel,” Kumaran says. Eighteen months ago, that channel might have been Pinterest, he notes. Now the interest in Pinterest is “quieter.”

PunchTab’s approach is to incorporate information from multiple sources, such as FourSquare check-ins, or POS systems, or digital receipts. But mostly, the company focuses on workarounds that enable as much flexibility as possible.

One quick service example that PunchTab is working with is Arby’s Restaurant Group. Arby’s didn’t think it could do a loyalty program because it is working with 50 different types of POS systems. But PunchTab created a solution that focused on in store traffic data, allowing to identify tens of thousands of potential customers for a new product that it rolled out.

Looking forward, Kumaran is looking at the whole new range of channels that are expected to come on the scene. “Wearables,” such as smart watches and FIT bands, add a whole new set of data that can determine loyalty factors, he said.