Extending the Power of your POS to Loyalty and CRM

Mark Horbal, CIO & CTO, SpringBIG
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Mark Horbal, CIO & CTO, SpringBIG

Your POS is your workhorse. It sees every transaction in every store. It records all of your sales, it interfaces with your supply chain, it reaches out to payment gateways—in short, it is the focal point of store operations.

Extending the integration of your POS to your loyalty program and CRM makes a lot of sense. Why? Simply put, the POS is centric to your interaction with each customer who makes a purchase, and can provide a more meaningful and engaging shopping experience. How? We’ll describe POS enhancements for loyalty and CRM as well as other valuable functions. These features can be added to virtually all POS types. For many of these, the business cases and associated ROIs are compelling and easy to demonstrate. In other cases, one can make the case that additional ROI is realized from extending the useful life of aging POS technologies.

Fundamentals of the Approach

Before delving into the specific enhancements, let’s spend a moment on the “how” of these enhancements work. All of the ones presented here, make use of web services to communicate with an external provider. So what are “web services”? Simply put, web services are a mechanism via which a client computer, in this case your POS, makes a real-time call (request) to a remote server.

Although this call is made over the public network, it is encrypted and secure. One or more parameters are sent to a remote server. The server responds in real time, returning similarly encrypted data to the POS, where it is used. The entire round trip takes less than a second, typically 10s to 100s of milliseconds. In the remainder of this article, we describe such web services, each providing one or more enhancements to your POS.

"Extending the integration of your POS to your loyalty program and CRM makes a lot of sense"

Integration

So what about the integration effort? Well, there is undoubtedly some, however, it is usually straightforward. Generally speaking, once one or two web service-based POS enhancements have been implemented, the trail has been blazed and others follow more easily. Obviously, rigorous testing and functional certification is a must prior to deployment.

No Hardware Upgrades

Before we delve into actual use cases of extending POS functionality via web services, let’s understand that functions described here are not all novel or unique – what is important, however, is that in combination, they form a significant array of new extended functionality that can be realized without upgrading your POS infrastructure. As we work our way through these enhancements, we will divide them into two groups:

• Loyalty/CRM Enhancements

• Operational Enhancements.

Loyalty and CRM Enhancements

• Real-time Transaction Feed

This functionality is central to implementation of agile loyalty systems. A single web service call is made to the loyalty provider, containing all of the relevant details of the transaction. When received, such transactions are immediately processed and become visible to the consumer via the web, mobile apps etc.

• Receipt Messaging

Loyalty Computation, Total Points, Next Reward or “Please complete your enrollment on the web at “www.mystore.com”. This type of data can be returned and printed on the receipt, usually in response to the above transaction.

• Coupon and Offer Delivery

Any web service call can be used to produce output that can be printed on the receipt. This is an ideal mechanism for delivery of targeted communications such as coupons or offers to specific users. Offline targeting or segmentation programs need to be executed by your provider so that unnecessary latency is removed from the interaction.

• Member Lookup

Questions like “How many points do I have”, or “I forgot my card” arise frequently. This is a very useful call to retrieve an ID or membership number or perhaps other information, for example allowing verifying a phone number or an email address.

• Reward Card Redemption

There are many options available for reward redemption, ranging from personalized coupons, discounts against current purchase, gift/reward card redemptions an others. Suffice it to say, the ability to use your POS for this purpose can greatly enhance the loyalty member’s experience.

• Enrollment

This is a big one – enroll your new member right at the POS – no forms and no hassle. The big objective is to capture his/her email address or phone number so that you can communicate and push offers. In case of loyalty programs, this type of call can have the ability to immediately assign loyalty numbers, print a temporary card on the receipt and queue an offline fulfillment of the permanent card.

• Profile Update

Similar to the Enrollment, this method is used to update the member’s information, such as phone number email etc.

• Account Merge

POS can employ real-time services to link multiple accounts that a member may have – scan both cards, send them both to the loyalty provider and the accounts are linked. Different options are available, depending on business rules, but you get the idea.

• Receipt Adjustments

What’s this? Simply put, it’s an after-the-fact mechanism for associating a previously made purchase with a member’s account number – she may not have had the card with her when the purchase was made, but now wants the points. No problem – enter a few key items from the receipt, swipe the membership card and make a web service call to the provider. DONE.

Operational Enhancements

Email receipts
The web service call queues your e-receipt to email instead of printing it at the POS. Are we saving a tree? Yes – we’re also capturing your email address!

Single-Use Coupon Redemption
You can manage your promotions and coupons, tracking and validating their use via real-time web services. As a bonus, there are some fraud prevention features here as well.

Integration with Email and SMS
When real-time web service calls are made to the offsite servers, new options become available for integration with email and SMS messaging, resulting in new communications possibilities. You can easily use either one or both of these communications channels to say “Thank You”, report points earned, points needed for the next reward or to send an offer to prompt a return visit.

Security

How secure will your new extended functionality be? The short answer is that it can be very good, if properly implemented. There are a number of techniques here, each with a different trade-off, some involving costs. In general, here are some guidelines:

• Real-time web services should use SSL for encryption of data in transit and authentication of the server/host. This is a must.

• Additional authentication credentials should be used in order to eliminate the possibility of fraudulent transactions originated by nefarious users and not by your stores.

• Better yet, fixed IP addresses in your stores, or a common egress point in your network, can be used by the servers to validate your legitimate originating IP addresses.

• The more expensive option of client-side certificates is available as well, if the web service calls originate directly from the stores.

In Summary

Extending your POS functionality in the way described here is frequently a good way to accomplish tighter integration with loyalty programs, CRM as well as providing a richer customer experience during checkout. In other cases, these functional extensions to your POS are a good business strategy by prolonging the useful service life of your POS infrastructure.

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