Article

How the ATM may help retailers win hearts

A new ATM-based loyalty enrollment system expands the merchant's marketing footprint.

February 10, 2012 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

Retailers love loyalty programs, but when it comes to promoting them beyond the store's four walls, the marketing cost can become so high that it negates the value of the program.

In-store loyalty enrollment may help secure a retailer’s customer base, but it does nothing to expand it. And just as studies show that loyalty program members spend more at the cash registers, they also reveal that by adding a mere 5 percent to the customer base a retailer can increase profits by 100 percent.

Now, thanks to a new marketing strategy from Payment Alliance International that combines ATMs with such programs, merchants can have access to a virtually limitless set of consumer touchpoints.

“We don’t view ourselves as an ATM company. We don’t view ourselves as a bankcard company,” said PAI director of product development Jason Kuhn. We try to be a solutions provider. We look at our merchants and we try to see what else there is that we can do.”

PAI found its starting point in a mobile marketing system for retailers that PAI already had in the field. This program allowed merchants to enroll customers in a special promotional program using their cell phone number. Once enrolled, a customer would receive alerts via SMS whenever the retailer was running a deal.

Like most other loyalty programs, though, the weak link in this mobile program was its reliance on in-store signage and prompting by sales associates to drive enrollment.

“We were trying to think how we could boost this a little bit to give the customers another way to gain enrollment and also allow folks in our mobile marketing program to farm for enrollments at the ATM” said Kuhn. “We’ve got this great landscape of equipment out in the field and we need to be able to leverage that and turn that into something that can be beneficial to our merchant base.”

PAI found a way to merge two business segments with an ATM-based system that invites consumers to enroll in a retail loyalty program while they wait for a banking transaction to process. The merchant can choose to tie this program to an in-store ATM, but an on-site machine is not required. Participants in PAI’s mobile marketing program can use any ATM operated by PAI or its market partners, selecting ATM locations that fall within their service area.

For the user, the procedure is automatic and hassle-free. The customer swipes her ATM card and responds to the usual machine prompts. Once the transaction is in process, the ATM brings up a screen with the loyalty program information, including brand graphics and message, a mobile sign-up number and the standard notification that carrier charges for SMS messages may apply.

The customer simply responds yes or no to the invitation. If yes, she is prompted to key her mobile number into the ATM, after which she will receive a confirmation text on her phone. If no, her banking transaction concludes as usual.

“They opt in right there,” said Kuhn, “and the ATM takes care of the enrollment process … so it makes that call to action just a little bit easier for the consumer. They get the enrollment text, they hit accept and they’re good to go.”

Simplicity would be just as important to a merchant deciding whether to join an ATM loyalty enrollment program, said Lori Walderich, CEO of IdeaStudio, a branding and marketing firm. “The first question out of their mouth is, ‘Do we have to change our system?’” Walderich said. “You have to be able to say to them, ‘You can increase your loyalty program without changing any of your operations or having to train any of your staff at all forty of your stores.’ And you have to make it so ridiculously simple that the cost of it is worth it to them.”

Kuhn said that the program is exceptionally simple for the retailer to manage using a web interface that gives them “complete and total control” over set-up. The operating system can be configured to meet an almost endless range of parameters, he said, including times when the program will run. For instance, if an ATM tends to be particularly busy during certain hours or on certain days, the program could be set to deactivate during those times.

Walderich said it would be important for the merchant to offer an incentive for enrollment, most likely a coupon with a high enough value to persuade the customer to volunteer their cell number. Another inducement, she said, would be to offer the customer extra loyalty points for revisiting the same ATM, something that would benefit not only the merchant whose space the machine is in or near, but also the ATM owner. “[The customer] might change the machine they use to get the points,” Walderich said.

One more critical point, Walderich said, is to be able to assure the merchant that a system has been thoroughly tested and proven. According to Kuhn, PAI is currently working on that phase of the program. “We’re really grateful for our customer base that they’re willing to go out there and try stuff with us. You can think you’ve got the best product in the world, but until you put it out there … " he said. "And when they come back and tell you ‘hey, this is really working well,’ that’s when you know you’ve got a success.”

Jason Kuhn will discuss this and other industry initiatives on day two of the ATMIA US conference in a breakout session titled “Long Live the ATM: With or Without Traditional Plastic Cards.” The conference takes place February 29–March 2 in San Antonio, Texas.

For more information on this topic, visit our multifunction ATMs research center.

About Suzanne Cluckey

Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.