In the digital age, loyalty programs are getting an overhaul. Today’s example is an alliance between mobile rewards company Kiip and fast-food chain Taco Bell, which has created a loyalty program dubbed Taco Bell Explore.
Taco Bell and its franchisees operate more than 6,000 restaurants in the U.S. with more than 36 million customers every week. But the company wants those people to come back even more, and it wants to reach them via a mobile app that gets them to act on the spur of the moment. The app launched early last year and is getting downloads in the millions.
The app is a good match for Kiip, whose mobile loyalty technology lets clients reach fans “in the moment.” Taco Bell’s Live Más mobile app lets users order food that can be ready when they arrive in the restaurant. They can also get coupons, and now they can play on Taco Bell Explore, which is a kind of puzzle game powered by Kiip. In this case, Kiip is a white-label service provider.
“We considered white-labeling Kiip’s technology for a long time,” said Brian Wong, CEO and cofounder of Kiip, in an interview with VentureBeat. “We were waiting for the right partner. It had to be a brand that already has a powerful app. We wanted something people already used. Taco Bell’s app has done very well. People are using the app to order tacos ahead of time.”
So the two companies moved forward and refined the loyalty program. In December, the results of the collaboration launched. There has been a double-digit opt-in rate for the loyalty program.
The Explore program doesn’t simply require a user to earn points by make purchases on Taco Bell. Rather, users earn rewards when they connect their social networks to Explore. They then use the social networks in a normal way, and place orders in the Taco Bell app. Taco Bell sends along puzzles to the user, and if the user completes the puzzles, they can unlock rewards.
The creative thing about the program is that people can earn rewards from social moments that happen outside the app, like tweeting about the concert they’re at or sharing a selfie on Instagram. Explore rewards people serendipitously. It is triggered through specific keywords, likes, checkins, and hashtags. Because you connected the social networks to the app, Taco Bell is essentially listening for a trigger, or moment, that is an opportune time to offer the consumer a reward.
“It’s important that Kiip is powering the entire thing, and it’s also very important that it is mobile first,” said Wong. “For Kiip in the past, we rewarded people at the point where a customer engaged with a brand. Now we can reward them now that they are already a customer. It instills loyalty.”
Taco Bell’s in-app rewards can be exchanged for real-life prizes that range from free tacos to a trip to Taco Bell’s test kitchen to a $100 gift card. It’s a game where users can win rewards just simply living their life and sharing it on social media.
“Taco Bell is trying to be a part of the lifestyle of the consumer. This is a modern approach to brand building,” Wong said. “It isn’t about how you have to watch a video for minutes. You are rewarded for a lot of the behaviors that are aligned to the Taco Bell brand. We will acknowledge you for those deeds as you do them. We’re not going to make you do them for a carrot. I think that is very important.”
The Kiip-Taco Bell deal comes after Kiip cut a deal with MasterCard. In that announcement, Kiip said it would power MasterCard’s Priceless Surprises app.
“Any entry into the loyalty programs space has to be engaging, easy to use, fair, and offer relevant rewards in order to succeed, according to research by Colloquy,” said Stewart Rogers, analyst at VentureBeat’s VB Insight. “There are 3.3 billion loyalty program memberships in the U.S., an average of 29 per household — that’s a crowded space, even taking into consideration research from Cap Gemini that suggests only 44 percent of those memberships are in active use.”
Kiip first launched its loyalty platform in 2014. Wong said that the measured “moments” for which brands can offer rewards grew 230 percent in 2015. Revenue has been growing quarter over quarter at a rate of 60 percent, he said.
“It’s a big testament to the folks who are interested in what we are doing,” Wong said. “It’s very exciting.”
Wong is speaking at the Mobile Ventures Summit in San Francisco today with a Taco Bell representative.
The Taco Bell mobile app is available on iOS and Android. Kiip has raised $24 million to date, with backers including Hummer Winblad, Relay Ventures, True Ventures, Verizon Ventures, Digital Garage, and IPG.