Reward Loyal Customers With LocalBonus

Ditch the frequent visit punch cards and complicated smartphone apps. LocalBonus is a different way to reward customers.
Writer, editor, Street Fight
June 12, 2012

Cultivating a strong contingent of loyal customers is key for any local business trying to stay afloat in today's tough economy. While loyalty platforms that rely on smartphones and digital check-ins have become popular in recent years, the reality is that not every customer owns a smartphone or feels comfortable using it to pay for goods and services. LocalBonus is a turnkey program that rewards frequent customers without requiring them to use punch cards, key fobs or smartphone apps.

How It Works

Anyone with a credit or debit card can use LocalBonus to start earning cash-back rewards for shopping at more than 800 merchants across the U.S. After signing up to participate on the LocalBonus site, users are asked to enter information for at least one credit or debit card. Each time this card is swiped by a merchant who participates in the LocalBonus program, the customer receives points. The specific number of points that a customer receives varies depending on the amount spent, with rewards starting at 4,000 points for $10 cash back. LocalBonus users can also earn extra points by participating in Facebook and Twitter promotions, or by shopping at five or more LocalBonus member stores in a single day (known as a "WolfPack").

LocalBonus in Action

Local merchants in New York, Portland, Denver, Sacramento and Seattle can start offering rewards to their most loyal customers without any point-of-sale integration or employee training programs. Instead, they just need to sign up to become partners in the LocalBonus platform. Sales associates swipe their customers' credit cards, and LocalBonus pulls out key data for any card that's been entered into its system. In addition to providing merchants with spending details and transaction histories, LocalBonus also offers insight into customer return rates and lifetime shopping habits.

Although LocalBonus users accrue points for shopping at participating merchants, those merchants don't have to worry about doling out rewards or keeping track of redemptions. LocalBonus handles all aspects of the point tracking process, and automatically rewards its users with cash back when they reach certain points thresholds. In exchange, LocalBonus charges merchants on a "pay-for-performance revenue model" that varies based on the amount of money LocalBonus users spend at the merchant's establishment.

Why It Works

Two main elements differentiate LocalBonus from competing loyalty programs, the first of which has to do with universality. Unlike some of its competitors, such as Swipely, LocalBonus is a universal program that people can use to earn cumulative rewards at hundreds of establishments. Rather than pitting local businesses against each other in the hunt for consumer dollars, LocalBonus encourages merchants to work together for the greater good. The universal nature of the LocalBonus program also ensures that customers can earn points and cash back rewards more quickly.

The second way that LocalBonus differentiates itself from competitors is by relying on credit card transactions instead of mobile wallets or QR codes. This opens up the market and increases the number of customers who can feel comfortable joining a business' loyalty program.

Maximizing the Benefits

Given that LocalBonus is a universal program, it makes sense for merchants to work together to promote the service. Businesses should refer their customers to other establishments within the LocalBonus network, not just as a way to help those customers earn more points and cash back rewards, but also as a way to keep spending local and foster a sense of community among customers and neighboring establishments.

Read more "How It Works."

Stephanie Miles is an associate editor at Street Fight. She is based in Portland, Ore.

Photo credit: LocalBonus