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For Privacy-Wary Consumers, Anonymity And Beacons Power Northeast Loyalty Programs

No names or other personal info are needed to get a free cup of coffee at a café using Estimote’s Bluetooth devices and Adored’s phone ID-based rewards platform.

The Adored app unlocks rewards for customers by recognizing their phone's user ID, not their personal info.
The Adored app unlocks rewards for customers by recognizing their phone’s user ID, not their personal info.

App-based loyalty programs tend to face several major challenges in getting consumers to adopt and use them — with privacy issues and convenience being at the top of the list.

Beacon marketing provider Estimote has been expanding its partnership with New England startup Adored on trying to take the worry and friction out of targeted rewards programs on behalf of independent businesses.

False Choice: Big Spending Or Old Tech

“Unless you’re Starbucks or you can spend all this time and money investing in really sophisticated loyalty program, it’s really hard for local small businesses to market rewards right,” said Tanuj Parikh, Estimote’s senior director for Business Operations. “They more or less usually end up at the lowest common denominator, which is a punch card system. And that old-fashioned method is a silly thing to be using these days.”

Aside from eschewing punch cards, when it comes to Adored’s loyalty program, the company has tried to differentiate itself by avoiding the privacy issues associated with having consumers input their name and email, or connecting through their social network identities.

Instead, Adored offers to save a consumer’s (otherwise) anonymous phone ID so it can be recognized when they’re walking into a local establishment that they’ve been to before and have expressed an interest in receiving messages touting its offers and announcements.

In a sign that Adored’s softer loyalty connections have worked for its clients, the company cites the experience of its client, Cafe la Reine. The Manchester, NH coffeehouse has used Adored since last year and credits the rewards program with helping boost average visits per customer per week from 2.1 to 2.5 — a 20 percent improvement. In an other example, Gilford, NH-based Gunstock Mountain Resort saw a 5 percent gain in consumers responding to its real-time targeted upsells (i.e., purchases made at the resort by current guests that yield incremental revenues).

Beacon-Based Loyalty

While Adored can store a phone’s user ID, Estimote’s beacons make it possible to accurately zero in on the right signal. Given the various levels of geo-data quality that persist, it’s hard to use GPS, cell phone towers, and other geo-fencing signals to target users near a particular business, especially in denser environments, Parikh said.

“If I’m walking along a block in Boston or New York and there are three coffee shops nearby, for my phone from GPS to figure out which one I’ve actually stopped at, is really hard to do — if not impossible,” Parikh added “But for a beacon to deterministically say, ‘That’s John Smith, he’s walked in,’ that is much more doable without any additional technology layered over.”

Estimote's Tanuj Parikh
Estimote’s Tanuj Parikh

Estimote and Adored have been working together since last fall and the two have installed beacons at “hundreds of locations” from ski resorts to theaters to bars and restaurants, Parikh said.

Despite the different kinds of “loyalty mindsets” skiers and coffee drinkers might have in relation to a particular business, the ability to identify a specific customer and reach them with a specific marketing message can cut across advertising categories, Parikh added.

“The exciting thing about beacons is that they work in so many different contexts for so many different use cases — and loyalty’s one of those use cases,” Parikh noted. “For Estimote, our focus is strictly on making sure the hardware and the software are working to power what a partner like Adored needs. With that out of the way, they’re free to think deeply about loyalty, how do they acquire customers, and ultimately allows them to do what they do best: which is concentrate on building and managing their clients’ loyalty programs.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.