FlockTAG, which uses NFC-based technology to build loyalty programs and “microeconomies” with networks of local businesses, expects to concentrate its near-term growth in the Midwest, though the company may look to move into larger cities than where it is currently.
The company, which started in Ann Arbor, Mich., also has a presence in East Lansing, Mich., Champaign, Ill., and Columbus, Ohio, all Big Ten college towns. The college demographic is very receptive to the technology and the idea of close-knit relationships between local businesses, according to FlockTAG co-founder Adrian Fortino. “We combine digital loyalty with deal creativity in a single application and a single system.”
FlockTAG is designed to enable customers to eliminate the punch cards that many of the smaller restaurants and coffee shops, which are the target businesses, have tended to rely on for their loyalty programs. Rather than carrying a handful of these punchcards, FlockTAG consumers can use their phones to receive “stamps” or punches.
Consumers start by picking up a FlockTAG card at a local business. The company expects to soon have an online list of all participating businesses. Until then, it is offering to alert customers by e-mail. Customers register the FlockTAG card by swiping it at the registration kiosk (each participating business has one) and following the few sign-up steps.
FlockTAG offers an app for iPhone or Android phones, enabling them to receive and check stamps and rewards. Customers who don’t have that capability on their phones can receive offer and reward notifications via text messages, and can check rewards by swiping their cards at FlockTAG kiosks.
Foritno sees the back-end engine, the FlockTAG Consumer Growth Engine as the technology that sets the company apart from others in the market. FlockTAG’s technology analyzes more than 20 factors of consumer behavior in order to generate offers.
“We offer consumers three different types of deals,” Fortino said. “One would be deals for places they go infrequently to get them to come in more frequently. Another would be for a place they frequent to encourage them to purchase items with higher margins. The third would be offers for places they typically don’t buy from. Our analytics are designed to provide deals that will get consumers to come in and do more business.”
Online analytics reports enable companies to monitor effectiveness of offers.
Fortino says the company’s deal relevance eliminates the cannibalization of sales, one of the major complaints that merchants have with daily deal sites like Groupon.
About 45,000 consumers and more than 55 businesses, with several others under contract, are using the FlockTAG system today.