Punchh: Helping restaurants adapt and succeed during the pandemic

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Over the past several months, as the pandemic has raged globally, the restaurant industry has experienced some of the most dramatic changes in customer behavior and expectations. The operators have adopted new strategies to drive sales. For example, they are executing higher volumes of family-oriented marketing tactics like meal kits, kids eat free campaigns, and elderly-only hours. They are creating campaigns to support local communities, like offering discounts for healthcare workers and first responders or giving away gift cards. Restaurants are also increasing deployment of digital innovations such as online ordering, curbside pickup, contactless delivery and contactless payments.

The shifts have accelerated the digital transformation of the restaurant industry, making it vital for brands to adjust their near and long-term business operations. The role of technology has been enhanced. The complex tech stack including systems for point-of-sale, ordering, payments, delivery, loyalty, ERP, and kitchen display systems, is being re-evaluated. For restaurants that pride themselves on creating and serving good quality food, they are demanding better technology solutions to enable their business operations.

Cervin portfolio company, Punchh, is leading the charge for digital transformation. It has built the leading “restaurant industry platform” to integrate user experiences across in-store, web, mobile and text with integration to various POS, payment systems, and delivery and ordering platforms to drive loyalty, customer retention and life-time value (LTV). Punchh provides restaurant operators with the ability to integrate in-store and online experiences, an elusive goal until now, making the physical presence an advantage in the digital world.

Loyalty re-defined for a new era

In the early days of the pandemic, many restaurants had to temporarily close their stores, and most consumers were reluctant to dine out, primarily because of safety concerns. Online ordering, curbside pickup, contactless delivery, and contactless payments has made it safer for customers to frequent their favorite establishments. To help drive sales, many restaurants have doubled-down on their loyal customers, communicating with them regularly and creating special offers for them. The Insights Resource Center from Punchh has been a great resource for information sharing and best practices for the industry as it navigates the disruption. Several brands that use the Punchh platform have grown despite the challenges the pandemic has thrown their way.

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Photo by Gustavo Fring from Pexels

“The app database has grown to more than 1 million registered users in part due to regular disruptive offers only available to app users such as a free chicken crunch burrito on National Burrito Day, and turning our Tuesday Taco Night into an all day offer while harnessing the power of one of our delivery partners to engage their large, hungry user base.”

Del Taco CEO, John D. Cappasola

Customers such as the pizza giant, Papa John’s, with its Papa Rewards program, powered by Punchh, are delivering tailored rewards and offers based on customer behavior. They have seen outstanding success, growing to over 16 million members. They reduced their reliance on discounts to increase profitability, reporting a 28% increase in year-over-year same-store sales and a 2.5% increase in member lifetime value in Q2, 2020, the height of the pandemic.

The Case for Loyalty

Acquiring a new customer can cost up to 5x more than retaining an existing one. Increasing customer retention by 5% can increase profits from 25–50% and the success of selling additional products to an existing customer can be as high as 60–70% but only 10–20% to a new customer. Marketers simply cannot ignore these numbers.

Many companies have gotten good at collecting data from multiple sources such as their mobile app, POS system, online ordering/ecommerce channels and social media review sites. They now need this data to be analyzed in real-time to help them gain better insights to improve customer lifetime value (CLV). Companies need to move toward automated, decision-making processes powered by artificial intelligence (AI) and machine learning (ML). Advanced predictive analytics can help them positively re-define customer interactions and customer journeys. Leading marketers that make investments in AI can gain the ability to process large quantities of data in an unbiased manner, identifying trends and insights that promote faster decision-making. They can position themselves to be more competitive.

Optimizing for Loyalty

At the heart of every company are its customers. Punchh helps brands connect with them at a deeper level through forward-thinking analytics. Gathering data from all possible touchpoints and using ML-driven predictions and recommendations, brands working from the AI-powered Punchh Platform create and deliver personalized offers and messages over customers’ preferred channels, during preferred times to increase lifetime value and loyalty. Marketers can improve three aspects of CLV through customer micro-segmentation:

- frequency (how often does a customer visit)

- recency (how recently did they visit last)

- spend (increase in average transaction size)

As the restaurant landscape continues to evolve quickly, inspiring loyalty will be paramount to a brand’s success. With help from Punchh, brands have the tools and data analytics to forge important digital connections necessary for building meaningful, 1:1 relationships that grow lasting customer loyalty. To learn more about Punchh, visit their website.

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Cervin Ventures is actively investing in entrepreneurs and companies that intend to rapidly disrupt the B2B software space

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