Foursquare on Rails

[Phinnaeus Gage]

Groupon and its many imitators have been facing a rising tide of negative publicity over the past few weeks, the gist of which is that Groupons are terrible for small businesses.

The stories are all pretty much the same: business owners sign up for a deal that would lose them money in the hopes of upselling and bringing customers back for full price purchasers. Instead, they find themselves overwhelmed by swarms of rude bargain hunters who crowd out full-price customers, refuse to spend anything beyond the face value of the coupon, and are never seen again.

http://articles.businessinsider.com/2010-10-05/tech/30013393_1_groupon-businesses-sustainability

Businesses seek loyal customers, but from the looks of it, they're not able to convert new patrons into repeat buyers once they use their Groupons. Perhaps, a better business model to attract customers needs developed.

Until a better name is derived, I'll refer to this idea as Foursquare on Rails, or FoR for short (apologies if FoR is a bad analogy for what I'm proposing).

The following example is how it could work:

A newly opened restaurant--Ombra--wants to attract a loyal customer base, but doesn't want to go the route of Groupon and its ilk. Enter Bitcoin and the yet-to-be-developed-APP FoR. Firstly, Ombra's must accept Bitcoin to enjoy all its benefits, some of which yet to be named and, let alone, developed. A Bitcoiner dines at the restaurant for the first time and pays full price for their meal with Bitcoin via a smart phone. A little code (boy, I hope codes are little) is activated, allowing the Bitcoiner a one percent discount off their next visit's tab. This percentage is doubled if they bring a guest(s) and is rung up as one tab. This offer is only available for one week, whereupon once the week is over, the Bitcoiner must pay full price again and restart the whole procedure. But this is only true for the first week.

You see, each time the Bitcoiner returns to Ombra's, they're rewarded with an additional 1% discount, up to a max of 10% (20% with guest(s)). If on his 4th visit a Bitcoiner pays for his meal with Bitcoin, he's now at the 4% (maybe it's 5% now, I'm getting confused) discount level, but if for some reason he failed to dine at Ombra's within a week's period, he forfeits 1%. Each week, he loses 1%, then after 4 weeks, he'll have to start all over again, but if he restarts his visits, say he's at the 3% level, the added 1% discount starts there.

Once at the 10% level (with a 20 visit minimum), a Bitcoiner can use this discount in conjunction with any other discounts that other patrons are able to enjoy: coupons (but not Groupons, which the restaurants won't have anyway), senior citizen discounts, etc.

After 10 visits within any time frame, a Bitcoiner will always maintain a 5% discount and can easily regain his 10% status after 5 more visits which, of course, can be accomplished in 5 days opposed to 5 weeks. This fact is indicative of a first time user of FoR. After 10 visits in 10 days, a Bitcoiner will be at the 10% level.

Now we have loyal customers being awarded for their visits, opposed to attracting new customers with a 50% discount that most of the time never return. As a restaurant owner, which would you rather have?

What's great about this idea is that more women are probably prone to take up these offers using their smart phones than men.

Thoughts?

~Bruno~ (not the Bruno Manser Fund)

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[adamstgBit]

Groupon and its many imitators have been facing a rising tide of negative publicity over the past few weeks, the gist of which is that Groupons are terrible for small businesses.

The stories are all pretty much the same: business owners sign up for a deal that would lose them money in the hopes of upselling and bringing customers back for full price purchasers. Instead, they find themselves overwhelmed by swarms of rude bargain hunters who crowd out full-price customers, refuse to spend anything beyond the face value of the coupon, and are never seen again.

http://articles.businessinsider.com/2010-10-05/tech/30013393_1_groupon-businesses-sustainability

Businesses seek loyal customers, but from the looks of it, they're not able to convert new patrons into repeat buyers once they use their Groupons. Perhaps, a better business model to attract customers needs developed.

Until a better name is derived, I'll refer to this idea as Foursquare on Rails, or FoR for short (apologies if FoR is a bad analogy for what I'm proposing).

The following example is how it could work:

A newly opened restaurant--Ombra--wants to attract a loyal customer base, but doesn't want to go the route of Groupon and its ilk. Enter Bitcoin and the yet-to-be-developed-APP FoR. Firstly, Ombra's must accept Bitcoin to enjoy all its benefits, some of which yet to be named and, let alone, developed. A Bitcoiner dines at the restaurant for the first time and pays full price for their meal with Bitcoin via a smart phone. A little code (boy, I hope codes are little) is activated, allowing the Bitcoiner a one percent discount off their next visit's tab. This percentage is doubled if they bring a guest(s) and is rung up as one tab. This offer is only available for one week, whereupon once the week is over, the Bitcoiner must pay full price again and restart the whole procedure. But this is only true for the first week.

You see, each time the Bitcoiner returns to Ombra's, they're rewarded with an additional 1% discount, up to a max of 10% (20% with guest(s)). If on his 4th visit a Bitcoiner pays for his meal with Bitcoin, he's now at the 4% (maybe it's 5% now, I'm getting confused) discount level, but if for some reason he failed to dine at Ombra's within a week's period, he forfeits 1%. Each week, he loses 1%, then after 4 weeks, he'll have to start all over again, but if he restarts his visits, say he's at the 3% level, the added 1% discount starts there.

Once at the 10% level (with a 20 visit minimum), a Bitcoiner can use this discount in conjunction with any other discounts that other patrons are able to enjoy: coupons (but not Groupons, which the restaurants won't have anyway), senior citizen discounts, etc.

After 10 visits within any time frame, a Bitcoiner will always maintain a 5% discount and can easily regain his 10% status after 5 more visits which, of course, can be accomplished in 5 days opposed to 5 weeks. This fact is indicative of a first time user of FoR. After 10 visits in 10 days, a Bitcoiner will be at the 10% level.

Now we have loyal customers being awarded for their visits, opposed to attracting new customers with a 50% discount that most of the time never return. As a restaurant owner, which would you rather have?

What's great about this idea is that more women are probably prone to take up these offers using their smart phones than men.

Thoughts?

~Bruno~ (not the Bruno Manser Fund)

with bitcoin, it would be easy for all restaurants to setup their own reward system, the restaurant could choose to give different deals to different customers.

someone would have to dev. a little bit of software to make this easier

[Stephen Gornick]

Bitcoin is an undiscovered gem for use in retail marketing.   Bit-Pay and others are figuring out the best way for consumers to pay merchants, but nobody is doing much thought on how Bitcoin enables the ability for merchants (or manufacturers) to pay their customers.

The use of bitcoins in a promotion enables many things -- not the least of which is that many of the expenses in fulfillment for the promotion can be offloaded (e.g., self-serve to the participant).

For instance, want to get customers to try Brand A versus Brand  B, but don't want to discount?   Simply include inside the packaging (or printed on the receipt when purchased) a paper Bitcoin's minikey and its QR code.  Include an expiration date so any funds not spent by a certain date are reclaimed by the promoter.

I almost convinced a restaurant owner I know to hand out a Casascius coin with each $25 order. Then the exchange rate rocketed up to where 1 BTC (plus the cost to purchase a phyisical coin) made the offer no longer feasible.  But maybe a 0.5 BTC gift (paper bitcoin with scannable private key QR code) would be a replacement that would still convey value.

[cbeast]

I almost convinced a restaurant owner I know to hand out a Casascius coins with each $25 order. Then the exchange rate rocketed up to where 1 BTC (plus the cost to purchase a phyisical coin) made the offer no longer feasible.  But maybe a 0.5 BTC gift (paper bitcoin with scannable private key QR code) would be a replacement that would still convey value.

If I understand the sweep function, you could make the QR code have a fiat money equivalent value by sweeping off the value and then putting it back on if the market price changes dramatically.

[evoorhees]

Bitcoin is an undiscovered gem for use in retail marketing.   Bit-Pay and others are figuring out the best way for consumers to pay merchants, but nobody is doing much thought on how Bitcoin enables the ability for merchants (or manufacturers) to pay their customers.

The use of bitcoins in a promotion enables many things -- not the least of which is that many of the expenses in fulfillment for the promotion can be offloaded (e.g., self-serve to the participant).

For instance, want to get customers to try Brand A versus Brand  B, but don't want to discount?   Simply include inside the packaging (or printed on the receipt when purchased) a paper Bitcoin's minikey and its QR code.  Include an expiration date so any funds not spent by a certain date are reclaimed by the promoter.

I almost convinced a restaurant owner I know to hand out a Casascius coin with each $25 order. Then the exchange rate rocketed up to where 1 BTC (plus the cost to purchase a phyisical coin) made the offer no longer feasible.  But maybe a 0.5 BTC gift (paper bitcoin with scannable private key QR code) would be a replacement that would still convey value.

+1, great points!

"Merchants paying their customers" lends itself in infinite ways to Bitcoin. The economics here is that every company will pay X to attract attention, because there is a knowledge gap and an inefficiency. There are customers who would buy stuff, if only they knew about the stuff. Thus, it makes sense to spend X to convey that knowledge.

Typically, business spend X by buying ads, etc, but there is tremendous inefficiency there, because the person who pays the cost of time (watching the ad) doesn't directly receive the benefit of payment for that ad (the person gets a TV show, but only after all the costs of marketing/production/etc.) If a company can easily PAY DIRECTLY to the consumer, then vast efficiencies can be realized.

Bitcoin is perfect because these payments to potential customers would typically fall in the category of micropayments. Modern finance systems are prohibitive, so the payments don't happen. Now that a payment system exists which lends itself perfectly to micropayments, the payments can actually occur, and creative new dynamics become inevitable. 

[istar]

Its a great idea.

It could also be used by a hairdresser.
Its easy to count transactions to an adress in the blockchain.
This means that each customer could get his own adress.

Once the customer have this adress in his app, its easy for him to pay to that adress.

This could also be used by all kinds of shops to tie customers.

It will be very easy keep track of how much you spend and also how much you have left.

What is needed is a counter that keeps track of the value of the total amount payed at each transaction.
Since Bitcoins fluctuate in value.

Maybe it would be possible for blockchain.info or blockexplorer to show the total value of an adress based on when each transaction occured.

like:

1 bitcoin sent in februari with a value of $6
10 bitcoin sent in januari with a value of $50

Total value when sent: $56
Value today: $60

[chsados]

watching

[Phinnaeus Gage]

Its a great idea.

It could also be used by a hairdresser.
Its easy to count transactions to an adress in the blockchain.
This means that each customer could get his own adress.

Once the customer have this adress in his app, its easy for him to pay to that adress.

This could also be used by all kinds of shops to tie customers.

It will be very easy keep track of how much you spend and also how much you have left.

What is needed is a counter that keeps track of the value of the total amount payed at each transaction.
Since Bitcoins fluctuate in value.

Maybe it would be possible for blockchain.info or blockexplorer to show the total value of an adress based on when each transaction occured.

like:

1 bitcoin sent in februari with a value of $6
10 bitcoin sent in januari with a value of $50

Total value when sent: $56
Value today: $60

Even though I used restaurants as my example, I meant to imply that this idea can easily apply to a myriad of businesses, a hair salon being another excellent example. Others my include tanning salons, pet supply stores, hardware stores, drug stores, shoe stores, bait shops, etc.

I would love to view a list of businesses owned by Libertarians. Any exist?

~Bruno~ (not Prete & Bruno)

[Phinnaeus Gage]

Fresh from doing some more homework on this idea, I present the following:

A 3 Tier (+1) Award Program

• 3% Discount Level
• 6% Discount Level
• 9% Discount Level
• 10% Discount Level, along with a myriad of added perks for the truly loyal customer

Once a customer reaches each level, there's never a fear of falling below it. Each level is easily obtainable, even the last one. To reach the last level, all a customer would have to do is dine at Mendoza's Mexican Restaurant (example) ten times within the allotted time frame (can be done in 10 days or 10 unique visits) plus 10 more visits using their now 10% discount. Once any level is reached, they can return to the restaurant after a long hiatus and still be able to use the discount that they have earned.

Perks are offered via an email newsletter and may include:

• Experience our new entrée at 50% off
• First Satoshi & Nakamoto cocktails on the house
• 25% discount for you and a minimum of 4 guess between the hours of ?&?--offer expires in X days
• One free entrée for taking our in depth survey
• Introduce a friend to this program and receive X

The goal is to keep this as simple and easily obtainable as possible, and at the same time benefiting the customer and proprietor.

There's no need for a customer to sign up, either. All they'll have to do is visit the restaurant, dine, then pay with Bitcoin, since they knew beforehand that the restaurant is part of the program. For trying the restaurant for the very first time, they received an automatic 10% discount, along with their 1% discount on their next visit.

Now, as far as those who want to game the system with what I've just outlined above, I suggest this--let them. A customer may automatically get his 10% discount by using a different Bitcoin address. But the restaurant will still get a loyal customer, albeit one that thinks he's getting away with something. But a customer that goes through the normal route, she'll enjoy a 20% discount when she's not dining alone and paying only one tab, plus enjoy other perks as I've outlined above.

Let's not forget the money saved/earned by these transactions normally lost due to being paid with credit cards.

~Bruno~ (not Bruno Ménard)

[Stephen Gornick]

The use of QR Codes for loyalty programs is something that keeps popping up and with greater frequency.

There has to be something where Bitcoin solves a problem or enables something new to happen in this space somehow ...

BellyCard mobile app and loyalty card system
Received $2.5 million venture funding today:
 - http://www.bellycard.com

Qricket:
 - http://www.qricket.com
 - http://betakit.com/2012/03/12/qriket-wants-to-make-scanning-qr-codes-a-profitable-proposition

McDonalds CoinHunter:
 - http://www.youtube.com/watch?v=6XHhl8i7n0o
 - http://www.creamglobal.com/listing-rss/17798/29205/coin-hunting

[CecilNiosaki]

Personally, I think this is a great idea. Not only does it work to support to bitcoin economy, but it also solves the main problem of groupin and it's kin, in that they don't encourage repeated visits. The program you propose is, st it's heart, a loyalty program, and people love to be rewarded for their loyalty in a meaningful way.

There is a local laser tag place by me that I only go to when there are groupons because it's 40$ per 1.5 hour session. However, if they had a program in place like this, I would be apt to go there more often and I believe that others would as well.

I will be following this to see what is done.

[LightRider]

http://www.youtube.com/watch?v=s3POdcyIlW0

Really interesting stuff here.

Edit: This part is more relevant actually.

http://www.youtube.com/watch?v=QG3JTXLg2Ho

[kjlimo]

http://www.youtube.com/watch?v=s3POdcyIlW0

Really interesting stuff here.

Edit: This part is more relevant actually.

http://www.youtube.com/watch?v=QG3JTXLg2Ho

This is old and 15 minutes long, but a very good find! 

[Phinnaeus Gage]

I, too, was going to revive this thread this morning after reading several articles on the Groupon debacle. But since we're are on another tangent, I'll hold off my commentary and expand upon what has been recently penned.

Source: http://betakit.com/2012/03/12/qriket-wants-to-make-scanning-qr-codes-a-profitable-proposition

When a Qriket player scans a QR code (any QR code) they get one step closer to winning the ultimate prize – cold hard cash.

As a consolation prize, Qriket could pay out in Bitcoin--cold, coded cash. They would only need to tweak their business model a tad to augment their crusade into a much more viable EnterPrize.

I think McDonald's, headquartered in Oak Brook, IL, is testing their Coin Hunter proffers in Denmark , prior to introducing the concept to the US market. Don't be surprise if we later learn that they got the idea, in great part, from BitcoinTalk submissions.

~Bruno~