Checking out – a new buzz word or the answer to monetizing location-based social networking?
Last week I feverishly posted about Venmo’s new “check out” service without much pause for explanation or analysis. So now, in a slightly calmer state of mind and with a few days spent mulling over the benefits, I’m back with more.
Venmo is an app which “makes it fun and easy to pay and charge friends” and is currently only operational in the US. Venmo acts as a social payment platform by allowing people to exchange money using their phones. Users can then socialise that transaction by attaching a message to the payment and posting it to Twitter or Facebook. It’s this social element which builds unique user stories around purchases – every brand’s dream.
Last week Venmo announced an extra service, which allowed users to attach their location to their socialised transactions – a behaviour Venmo have termed “checking out”. To me, this is exceptionally exciting.
Retailers are already getting on board with the idea of rewarding customers who check-in to their stores and unlock badges associated with offers and deals. A couple of weeks ago, Foursquare launched the ‘Century Club’ badge for people checking in for 100 days on the trot at the same place – rewarding their most frequent and loyal customers. I’m assuming it’ll be coffee shops and delis who will win Century Clubbers – low value purchases which are part of a person’s daily routine.
For any retailer or brand, loyal customers are their bread and butter – a guaranteed flow of trusted consumers. But for retailers with a higher ticket price, or for those wishing to distinguish between frequent, low-spending customers and occasional, high-spending ones, Venmo Places will be right up their street.
In my first job out of university I worked as the wholesale manager for a small boutique food company. After a few months I noticed that I was spending most of my time liasing with, negotiating with, advising and managing a handful of small independent food stores who, together, contributed to just a fragment of yearly sales. Meanwhile, our biggest wholesale customers were being ignored – placing high orders but rarely given the time to be sold in on new products and up-sold on their monthly orders. Having recognized this, I developed a simplifyed order process for our smaller customers, which took the pain out of managing them, and in turn, gave me more time to focus on our more profitable customers.
This is exactly what Venmo Places can offer – visibility on who your most valuable customers are. Not just those routine-orientated Foursquare Mayors who will stop by and check-in every day regardless.
By seeing spend against check-ins, retailers can map tailored rewards to a broad range of customers. They will have invaluable insight on the customers who spend $4 a day every day for a year ($1,460p/a) deserving little treats, and the customers who come in once a month and drop $250 ($2,400p/a) and who, with a little bit more attention and incentivizing, might be upgraded to a bigger monthly spend. It’s business basics with a modern flair. Call me geeky, but that seems like pretty powerful stuff.