The FintekNews team frequents Starbucks 6x a week, and while we still use a physical Starbucks card to pay for our caffeine addiction (because it’s a fancy special edition one with Swavorski crystals), it is not lost on us that a huge percentage of their customers order and pay for their purchases with their mobile apps. Ditto for Taco Bell and Dunkin Donuts, whose apps are the creation of San Francisco-based CardFree. In a recent study, the company has found that loyalty programs tend to increase mobile visit frequency and spend.
So, if you’re hooked on those tasty donuts and tacos, and gotta “Live Mas”, now you know why. Or perhaps more importantly to FAs and fund managers, if you invest in those stocks or other QSRs for your firm portfolio or a client’s, it would be wise for you to know, as part of your research, what their mobile payments strategy is, and refer to these customer examples from CardFree as the means to mobile success. You only have to read about the recent Starbucks mobile ordering debacle, and the subsequent hit to their share price from the negative PR, to see how important it is for QSRs to get their mobile strategy right from the get go.
“CARDFREE, a mobile wallet provider to large merchants, announced today that research across its platform shows that mobile consumers increase their visit frequency, ultimately doubling visits before stabilizing out to the new norm. In examining visit patters across users, CARDFREE research found that time between visits would decrease with each successive app use until about the 6th visit where users would normalize. On average, consumers who started out at a frequency of twice a month would increase visits to weekly and continue to maintain the new frequency level.
Since launching in 2012, CARDFREE has become the leading mobile wallet platform to QSRs (short for quick service restaurants), reaching over 22,000 merchant locations with access to more than 100 million consumers each week. The company has also expanded into casual dining as well as other high volume merchant segments and has seen more than 50 million transactions across its platform.
“Historically, we’ve seen that mobile consumers have a higher lifetime value than other consumers so the results of our platform research aren’t a surprise,” commented Jon Squire CEO and founder of CARDFREE. “What is a surprise is the level of increased frequency, which is very significant. In addition to finding that mobile is a driver of frequency, we’ve also found that adding a loyalty program tends to increase both frequency and spend. Merchants that use our full platform services including order-ahead, payments, offers and loyalty tend to see the most shift in behavior.”