AlleyCat Comics in Chicago’s Andersonville neighborhood has an unorthodox approach to rewarding frequent customers: Shoppers that hit 50 purchases get to punch a store employee in the stomach.
The rewards program is new, so the prize remains unclaimed. But because future winners will have spent a lot of money, “I guess I can take a shot in the gut,” said store owner Nicholas Idell, who opened the business with his wife four months ago and expects he’ll take all the hits.
AlleyCat Comics’ rewards program may be an extreme example of the creative tactics local merchants are employing to convert casual customers into repeat ones. But the store’s experiment, which also taps into technology from a Chicago-based startup called Bellyflop, is part of a larger push by startups to put a fresh spin on loyalty programs.
Such efforts to improve customer retention address a common dilemma faced by local businesses that have dabbled in the young but fast-growing phenomenon of daily deals, powered by companies such as Chicago-based Groupon and LivingSocial.
A steep discount can attract thousands of new customers, but merchants say the challenge lies in convincing buyers to return. That’s where these new technology companies are stepping in, harnessing such things as mobile applications and social media to keep merchants close to their customers.
“You’ve got consumers carrying, in many instances, a device which is the first time we’ve been able to know where they are at all times,” said Bryan Pearson, chief executive of LoyaltyOne, which specializes in strategy and customer analytics for big brands. “Secondly, you’ve got this rise of consumer power (through social media), which is helping those consumers hold companies to account.”
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