Friday, October 28, 2011

A punchd in the face for Groupon

Google eased access restrictions to Punchd. This is a QR code based loyalty system that’s entirely free to businesses up until they have more than 50 customers on it.

It’s not a voucher system. It’s loyalty. Rather than discounting in order to get disloyal customers in, loyalty systems reward customers for coming back again and again. In the past loyalty programs have been hard to manage as they require on-going paperwork whereas discount systems could be a one-off when budgets allow. Something like Punchd, though, changes that.



Once again I’m reminded of my conclusions from A4U this year. Voucher and even cashback sites are moving towards loyalty. Loyalty is a 2012 prediction for me.

I was also reminded of a local event up here in Edinburgh. Independently owned and business savvy tex-mex Illegal Jacks used Facebook to simply arrange a big discount day – on a Tuesday. This is within Facebook’s T&Cs as no one had to like anything; it was just a case of seeing what the interest levels were and if enough people indicated they were up for a Tuesday burrito then that was good.

Some loyal customer was inspired to make a cheesy ad. If you couldn’t see the obvious threat to Groupon then the name of the day “Group Off” makes it pretty clear. Also, it speaks to the loyalty of customers that anyone would be inspired to mock up an ad for their local eatery too.


Why pay Groupon a large chunk of the profits and perhaps not win a single new or loyal customer when you can do it for free via Facebook. Sure, Groupon guarantees money (providing they have the cash themselves) whereas the Facebook approach runs the risk of people saying they are interested and then not turning up. The risk/reward balance, to me, seems firmly in Facebook’s favour.

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