I’ll be honest, I once looked down or ignored store discounts or reward systems. They all seemed too contrived, so tedious, so totally not worth it and too much of a hassle. And then, before I knew it, bills are popping up out of nowhere and then suddenly I’m thinking oh my, we can get 15 percent off? Sign me up! Because these discounts really do add up.
ZAPtag is one of the newest players in this burgeoning field here in the Philippines. It claims to bring an innovative approach to the table, not even requiring a smartphone or data plan. It lets customers earn instant rewards, from five to twenty percent discount, and features jackpot prizes and coupons, all from lots of dining, shopping, and lifestyle establishments. On the inside track, ZAPtag makes money by charging merchants a fee for every transaction and also charges users an annual membership fee.
Two years ago Dustin Cheng and Terence Lok, also the founders of Words.PH, created the deal site Deal Dozen. What they learned was that, though great with initial sales, the merchants in charge were unaware if any of their customers came back to make return purchases – a common problem in the daily deals industry. It meant that retailers had no way of telling if they were building up a steady chain of return customers, or how effective their business was in terms of retention. What they needed was a loyalty program, and the seeds for ZAPtag were planted. Dustin tells us:
We knew there were a lot of out-of-the-box loyalty platforms out there, but these platforms were oftentimes too hard to use, too expensive to set up and did not provide merchants with adequate data. They were also very technical, and not easy to use for managers. Also by virtue of being an in-store loyalty platform, it was only good for that single merchant.
Terence and Dustin were joined in the fouding of ZAPtag by Justin Lim, entrepeneur and former Johnson & Johnson brand manager, and Angelique Uy, previously marketing manager for Branders.com, a B2B e-commerce site out of California. ZAPtag is also one of the startups that won funding from Kickstart Ventures, a wholly owned subsidiary of Globe Telecom.
To differentiate ourselves from all this, we wanted something that users can use no matter where they were, a universal loyalty card accepted across all merchants. We wanted to remove the hassle of needing to sign up for each and every loyalty card out there, only to leave them all at home.
Our goal is to acquire users through reward offerings from thousands of merchants. We are also looking at integration into ticketing systems. Imagine never needing to hold another paper ticket again! We see the ZAPtag being deeply integrated in our daily lives getting rewards every time there is spending! As for our long term goal, since our product operates as a platform, mimicking operation in other regions will be doable.
Zapping with tags
The no-smartphone-needed approach centers around a physical device called a ZAPtag. Once signed up with the service, you don’t even need to get ZAPtag itself right away, you can start earning points by entering your mobile number at their ZAP point-of-sale terminals, located at all their partner merchants. Once points have been saved up, you can purchase a ZAPtag for PHP 100 (US$ 2.42), either from the site or again from any partner merchant. You can also get a ZAPtag free with any purchase from their partner establishments. To use your points, simply tap the ZAPtag on the POS terminal, and one point on the tag is equal to one peso.
The list of merchants partnered with ZAPtag is impressive as well. From cuisine to gadgets and electronics, sporting goods to fitness centers, ZAPtag has you well covered no matter what lifestyle you lead, even if that lifestyle has you living without a smartphone. Dustin elaborates:
The ZAPtag is independent of an app. It doesn’t even require you to own smartphone. We will eventually have an app as an alternative to the physical ZAPTag. Right now, customers check their account on our website.
There are other loyalty programs out there of course, other discount-led promotions, but the ZAPtag team hopes to edge out this competition with the innovation and ease of use they’ve incorporated into their tags. One area is multi-store partnerships. ZAPtag plays host to a much larger collection of partner merchants.
As for the competition, Dustin confidently explains, “Perxclub and Pouch recently launched their stamp-earning mobile apps in the Philippines. But then again, we’re different from them as we give customers instant gratification – no need to wait for your 10th stamp to enjoy your reward as ‘cash back points’ can be used to pay for purchases right away. Plus, since mobile internet penetration in the Philippines is less than 20 percent, the ZAPtag doesn’t even require a smartphone or a data plan.”