Spoonity received the grant from Coral CEA last month to accelerate the launch of its loyalty rewards program. Restaurant owners using the program will reward loyal customers with specialized perks by using near field communications technology built into their customer's smartphones.
Spoonity co-founder Max Bailey said the technology required for the program will be progressively rolled between January to April. However, the company will not wait for its mobile app to be completed before courting local eating establishments. Over the next two weeks, the company will launch a pilot project with five Ottawa cafes. Customers can pick up a physical "tag" that can be scanned and used to gain status at any of the participating cafes.
The company will initially focus on the Ottawa market. The service will then be rolled out to other parts of the country, with Mr. Bailey identifying Toronto and Calgary as target cities.
The firm's service is free to restaurant patrons and provides them with one access point for all their customer loyalty rewards through their smartphone. A customer builds their status at restaurants that they frequent. Spoonity's revenue model is based on the performance of the program, with restaurants paying fees that commensurate with the profit of the program at that location.
"The perks that you get will depend on the status that you have, so the higher the status the better the perks. They can be anything from $2 off a dessert to buy one get one free," said Max Bailey, co-founder of Spoonity.
With rewards programs proven to increase business to restaurants by 15 to 20 per cent, the company is tapping into a traditional market to make implementing rewards programs easier for restaurant owners. It does this by providing them with a way to manage their program effectively, while at the same time, improving the experience for the consumer.
"Rather than having ten punch cards that (customers) put through the wash, they can have (single access), and they can use that at any one of their favourite restaurants to gain status and perks," said Mr. Bailey. "The value for the restaurant is that they get to recognize their most loyal customers regardless of who is serving them."
Traditional loyalty programs do not entice the customer to try anything new, and the rewards are the same for each customer regardless of how many times they frequent a cafe or restaurant, he said. Providing a variety of different incentives for consumer loyalty enhances the experience for the consumer and ensures they come back, he said.
Coral CEA is a not-for-profit network of businesses and organizations that are focused on the commercialization of communications enabled applications. The funding is provided to projects that aim to close commercialization gaps that would otherwise not be filled.