What's buzzing in your neighbourhood?

dubai - The Bebuzzd app facilitates small merchants to offer loyalty rewards to customers

According to a Forbes article 'Customer Loyalty In Today's Modern Retail World' (April 2016), for fast casual restaurants, as an example, oftentimes 60 per cent of customers never come back after their first visit. That's a very interesting statistic for how truly extraordinarily difficult it is for a small merchant to get repeat purchases.

Stacked up against the typical small merchant, there are multiple loyalty programmes in the market trying to grab your customer. See the box for a conceptual framework with some examples. This is more indicative than accurate.

Abdul Nazeer, CEO of Bebuzzd (www.bebuzzd.com), had this to say: "Small merchants educate me about what they want. I listen to the voice of my customer." In this David versus Goliath story, Nazeer is rightly equipping small merchants. In the UAE alone, over 70 per cent of the outlets would typically be considered to be small merchants. Of these, restaurants constitute the biggest chunk with nearly 35 per cent of the 40,000 outlets.

It's a rule of thumb that getting a new customer costs a business six to 10 times more than getting an existing customer to come back. A price that small merchants can hardly afford.

Here is the paradox. Despite the key strength of a local restaurant or store to connect one-to-one with customers, it is very difficult for the small business to capitalise on this advantage. Relationship management is usually informal and often left to the cashier, serving staff or the store clerk. Unlike the case of large stores or brands, owners and managers of small merchant establishments do not have much data about their customers - preferences, frequency of visits, average basket size or payment types. Without this data, converting a one-time customer to a loyal, repeat customer is next to impossible.

Bebuzzd mitigates this challenge. The Bebuzzd ecosystem consists of a manager level app, a store app and a customer app. Customers receive offers and rewards from merchants who have signed up for the Bebuzzd programme.

The salient feature of the Bebuzzd ecosystem is that each outlet provides its own unique value to the customer. The outlet decides on whether to reward customers with vouchers or points, or a combination. The customer can use the vouchers or points only at the merchant location that has provided it.

At the store, the customer activates the mobile app and selects the voucher or offer to be redeemed. The customer then communicates the voucher to be redeemed to the store's device. This is done via the near-field-communication (NFC) or tap-and-go capability of the customer's phone or via a QR code. The store app redeems the voucher when the customer keys in an identification number.

At the manager level, the app provides a view of new and repeat customers. By looking at the pattern of customer behaviour provided by the app, the decision maker can customise rewards, send one-time offers based on past behaviour or geographic proximity. This capability also allows the decision-maker to remotely monitor activity at the outlet in real-time.

The app works at different levels to create unique value for customers, store staff and decision-makers. For each constituent, it's a win-win. For customers, they get "big-store" kind of rewards from their neighbourhood outlets. For stores, they are able to capture local traffic. For managers and owners, they are able to influence behaviour and strategically plan based on real data.

Nazeer is a technologist by training and the app's user friendliness and architecture reveal a good grasp of technology, commerce and design. It has eliminated friction points such as printing and carrying vouchers, the cost of providing discounts as well as the resistance from merchants to fund third-party reward currencies or offers.

The Bebuzzd team has grown in strength and has recently won the Visa Loyalty Challenge in the Visa Everywhere initiative for Mena. Plans for the app include developing payment capabilities to support merchants and customers.

Wishing the Bebuzzd team all the best.

The writer is founding partner at BridgeDFS, a bespoke digital financial services advisory firm (www.bridgeto.us). Views expressed are his own and do not reflect the newspaper's policy. He can be contacted at sanjiv@bridgeto.us.