Historically, new technology has always been slow to trickle down to the local business level. With Fortune 500s pouring millions of dollars into research teams and hi-tech developments aimed at deriving more revenue from consumers, smaller businesses have been left completely behind. The rapidly increasing technology gap between large corporations and small businesses has led to a few very disconcerting repercussions. Most importantly, it’s making it harder than ever for local businesses to stay competitive with their corporate counterparts. Additionally, this disparity has led to a troubling trend in the ways that many technology companies attempt to capitalize on the huge opportunity that the local space provides.
Most recently, we’ve seen large companies like Groupon and LivingSocial enter the local business space with promises of helping small businesses acquire new customers. However, as the daily deal phenomenon spreads, so has the speculation over whether these deals are actually helping the merchants they’re selling to. As illustrated by Groupon’s current stock price and LivingSocial’s reluctance to go public, there are clear flaws in their value propositions to local businesses. Yet they’re still selling the benefits of extreme discounts to these merchants, regardless of the fact that many of their clients are actually being hurt by their services.
It’s with local businesses’ true needs in mind that FiveStars was created. Small business owners don’t need one-time deal hunters, they need to cultivate loyal repeat customers that spread word about their product and service to their network of friends. What most small business owners don’t know is that Fortune 500s spend millions of dollars each year on customer loyalty initiatives and they have access to technology that makes these initiatives extremely profitable. Meanwhile, small businesses are left with outdated methods like paper punch cards or the extremely limited loyalty services provided by POS vendors.
As with any industry at the point of technological disruption, there’s been a rapid emergence of hundreds of customer loyalty startups. However, as with many technology companies within the local space, the promised value proposition often differs from the actual results delivered. Other new loyalty companies have built standalone products that look technologically advanced by running on an iPad or smartphone, but in reality are nothing more than new forms of checkin systems (in the same vein as foursquare). There is no real transaction data collected and they’re not providing the merchant with tools needed to capitalize on the customer interactions. Furthermore, these new loyalty companies treat customer data the same way as daily deal companies; all of the data belongs to them, not the merchants. For instance, if a business owner ever wants to send an email out to their customer base, they have to first go through the loyalty companies’ sales representative and are often only allowed to do so a few times each year. These standalone loyalty programs can’t tie customers to their transaction history, so these (infrequent) emails can’t even be targeted to different types of customers.
FiveStars has chosen a much different path, making decisions that are less of a land grab strategy and more driven by the opportunity to truly help local businesses thrive. FiveStars’ patented POS integration allows for big data concepts to be harnessed for the benefit of local businesses. The transaction data collected by our loyalty software fuels a marketing suite that provides extremely targeted marketing tools, like segmented emails and text messages, that can be used by merchants at any time. Best of all, the FiveStars platform is automated and built to be extremely simple to use so that small businesses can focus on what really matters most: delivering the best possible products and services. Let us prove it to you!